• Key w/w moves: Cotton +7%; Polyester +2%; HW DWP +1%; China-origin DWP 0%, medium-grade VSF 0%; and high-end VSF +1% and Lyocell +1%. Cotton’s premium to VSF is 65% (2021 average: 30%) and a 179% premium to polyester (2021 average: 150%). The VSF premium to polyester is currently 69% (2021 average: 94%).
  • VSF was rangebound this week: The VSF operating rate is lower at 74% as Xinjiang, Sichuan and Shandong-based VSF plants lowered their run rates. Spinners continued to replenish stocks to meet the minimal requirements. Accordingly, VSF inventory days are up to 21.5 days. The theoretical VSF margin for Chinese producers is still in the red at -USD 139/t and the VSF/DWP spread is down 0.5% w/w (+12% YTD).
  • Domestic hardwood DWP flat, while the spot hardwood import price is up 1% w/w: The spot hardwood price is now up to USD 985/t and the DWP/pulp spread is currently USD 288/t (this level generally supports preference for paper pulp production over DWP production). Sun Paper (Yanzhou) and Hunan Juntai switched back to DWP production, while Sun Paper (Zoucheng) was already producing DWP.

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