- Key YTD moves: Polyester +25%; HW DWP +38%; China-origin DWP +26%; medium-grade VSF +14% and high-end VSF +15%. In contrast, Lyocell is down 5%.
- VSF prices gaining more traction: The VSF operating rate improved to 76%, while VSF inventory days dropped again this week to 23 as spinners snapped up lower priced VSF volumes. The VSF/DWP spread improved by 4% w/w but is down 0.5% YTD. The theoretical VSF loss for Chinese producers narrowed to -RMB 228/t (+18% w/w). With VSF sales gaining traction and the downstream sector slowly recovering, the VSF price is likely to improve from current levels.
- DWP prices remain stable: The Chinese market was stable this week, with domestic operating rates improving. Hunan Juntai and Sun Paper were both producing DWP, while Chenming Huanggang is testing to produce DWP. With restricted supply from South Africa and prolonged maintenance by AustroCel Hallein pulp mill coupled with the DWP/pulp spread currently at c. USD 343/t, price stability is more than likely.
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