• Mixed price moves for textiles this week: ICE cotton +2%; Polyester: +1%; VSF and DWP -1%.
  • VSF prices remain under pressure: The VSF market was stable to weaker and downstream plants purchased raw materials on need-only basis. The operating rate of VSF industry weakened w/w from 77% to 76% and inventory days increased from 26.5 days to 27.5. Theoretical VSF margin for Chinese producers improved but firmly in the red at -USD 68/t. The VSF/DWP spread was flat w/w (+7% YTD).   
  • Imported hardwood DWP prices down 1% w/w in China: Spot hardwood price is now USD 905/t and the DWP/pulp spread is currently USD 199/t (this level generally supports preference for paper pulp production over DWP production). In the Chinese market, Hunan Juntai was producing paper pulp and Sun Paper planned to convert to DWP. With the approach of Chinese Lunar New Year at the end of Jan, the trading mood in December may warm up.
  • Key YTD moves: Cotton +36%; Polyester +17%; HW DWP +24%; China-origin DWP +13%;
    medium-grade VSF +11%; high-end VSF +13% and Lyocell -8%. Cotton is currently trading at a 62% premium to VSF (YTD average: 27%) and at a 201% premium to polyester (YTD average: 145%). VSF premium to polyester is currently 86% (YTD average: 95%).   

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