- Key w/w moves: Cotton -4%; Polyester 0%; HW DWP +1%; China-origin DWP +0%, medium-grade VSF +1%; and high-end VSF +1% and Lyocell +0%. Cotton’s premium to VSF is 37% (2021 average: 30%) and a 144% premium to polyester (2021 average: 150%). The VSF premium to polyester is currently 78% (2021 average: 94%) and the lyocell premium to VSF is currently 9%.
- VSF price was up 1% w/w: The VSF operating rate is stable at 78% (was 78%). VSF inventory days are down to 13.0 days (from 15.5 days). The theoretical VSF margin for Chinese producers improves but remains in the red at -USD 133/t and the VSF/DWP spread is down 1% w/w (+11% YTD). Spinners continued to replenish stocks with expectation of higher high-end VSF prices and some replenished stocks for consumption till July.
- The Lyocell price is stable w/w: The operating rate of lyocell industry was close to 40% with rising run rates of the units in North China. Other plants were also considering about the restart but there was short availability of raw materials.
- Imported hardwood DWP prices gain further traction:The spot hardwood price is now USD 1,140/t and the DWP/pulp spread is currently USD 328/t (this level generally supports preference for DWP production over paper pulp production). The operating rate of Chinese DWP mills resumed to higher levels after some plants came back on stream from maintenance and both large-scale plants are running now. Supply remains tight.
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