• Key YTD moves: Cotton +16%; Polyester +18%; HW DWP +38%; China-origin DWP +27%; medium-grade VSF +14% and high-end VSF +16%. In contrast, Lyocell is down 6%.
  • VSF price slightly lower this week: The VSF operating rate declined to 78% as a unit in East China reduced production. VSF inventory days increased slightly this week to 25 as spinners were already generally well supplied. The VSF/DWP spread declined w/w and is now down 1.6% YTD. The theoretical VSF loss for Chinese producers widened further to -RMB 533/t as production costs increased further (chemical prices). With cost pressures mounting and contract to be fulfilled, further downside to VSF prices is unlikely.   
  • DWP prices stable: DWP/pulp spread remains high at c.USD 369/t, likely to encourage local producers to favour DWP production. Hunan Juntai and Sun Paper are both producing DWP, while Chenming Huanggang intends to produce DWP.   

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