• Key YTD moves: Cotton +32%; Polyester +26%; HW DWP +32%*; China-origin DWP +21%; medium-grade VSF +20%*; high-end VSF +19%* and Lyocell -8%.
  • VSF prices jump 15%* in past two weeks: Market activity has improved seeing a rebound in VSF prices. The VSF operating rate dropped to 60% last week (currently 62%) as more units were closed for maintenance and inventory days decreased to 34 (currently 33) as spinners started to build up stocks again. The VSF/DWP spread is up by 36%* w/w and is now up 14%* YTD. The theoretical VSF loss for Chinese producers remains in the red at -USD 344/t (chemical cost pressures) but is set to improve.
  • Imported hardwood DWP drops 4%*: Domestic DWP prices and imported softwood DWP have been under pressure, with imported hardwood now playing catch-up. Hardwood DWP averaged USD 1,012/t for the period July-September 2021.  The DWP/pulp spread has also contracted to USD 360/t*. A lower DWP price in isolation is negative for Sappi; however, the profitability of the VSF industry remains a key driver of DWP prices. With VSF prices up 15%* in the past two weeks, this bodes well to limit the downside on DWP prices from current levels.
  • *Table below incorporates w/w moves for 30 September: Key spot moves noted in report are as of 11 October.

Download Report