• Most textiles came under pressure this week but refined cotton (-10%) and cotton linter (-24%) were hit the hardest: The cottonseed price kept slipping as seed cotton harvesting was coming to an end and ginners started processing on large quantity.
  • VSF prices down 1-3% w/w: The operating rate of VSF industry improved w/w from 69% to 72% as some Shandong-based VSF units ramped-up. Inventory days increased from 24.0 days to 25.0 and the VSF/DWP spread is down 3% w/w (+21% YTD). Theoretical VSF margin for Chinese producers came under pressure and is now c.USD 28/t. Spinners continue to hold off from new orders, where possible.
  • Domestic and imported hardwood DWP prices down 1% w/w in China: DWP/pulp spread is currently USD 365/t. Trades for November are concluded with expectations for December trades to be lower.
  • Key YTD moves: Cotton +43%; Polyester +21%; HW DWP +25%; China-origin DWP +17%; medium-grade VSF +20%; high-end VSF +25% and Lyocell -8%. Cotton is currently trading at a 55% premium to VSF (YTD average: 26%) and at a 200% premium to polyester (YTD average: 144%). VSF premium to polyester is currently 94% (YTD average: 96%).    

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