For the Quarter Ending March 2022
North America
In North America, prices of Viscose Staple Fibre (VSF) increased in the first half of Q1 due to high demand from downstream industries. This uptrend was observed amidst prolong supply tightness as the industry faced operational cuts ahead of the Chinese New Year. The market later stabilized due to improved product availability in the regional market. Since the US relies heavily on China for the product, high freight charges and port congestion at Chinese ports disrupted the US market, while demand from woven and non-woven segments remained stable. As a result, the price of Viscose Staple Fibre 1.2D stabilized in the second half of the first quarter and settled at USD 2291/tonne CFR Texas in March 2022.
Asia Pacific
Viscose Staple Fibre (VSF) prices in India have been steadily rising since the first quarter due to a scarcity of raw materials, which is primarily imported from China. Due to the Chinese spring holiday, prices remained firm with high demand, resulting in a price increase. Grasim Industries, a key player in the Indian market, has planned to increase production to 801 KTPA through brownfield and debottlenecking initiatives, which would likely increase supply. In China, after observing a hike in prices in the first half, the price for VSF in the domestic market stabilized on the verge of submerged demand from downstream textile industries. Thus, in China prices for VSF 1.2D settled at USD 2297 FOB Shanghai in March.
Europe
In Europe, VSF market remained dull throughout the quarter due to supply disruptions caused by the Russia-Ukraine conflict. The conflict between two countries hampered the demand-supply chain. Textile manufacturers reduced their operating rates in the face of rising energy costs. The Feedstock for VSF and wood pulp prices have also increased, causing manufacturers to minimize production, amidst weak buying sentiment in domestic and international markets. As a result of fewer VSF inquiries, prices for VSF 1.2D settled at USD 2343 FOB Hamburg in February 2022.
For the Quarter Ending December 2021
North America
Demand remained stable throughout the quarter from both woven and non-woven segments. USA depends largely on imports of VSF from European and Asian nations. In the past, USA has been key destination for China, Thailand, India and others while Germany and Austria are key exporters from Europe. However, strong freight charges and shipping costs in H1 of Q4 from Asia to US West Coast and East Coast meant material reaching US shores was costly. However, freight charges eased towards H2 and consequently prices of VSF also observed some significant decline. VSF prices were assessed at USD 2295 per MT in October and dropped substantially to USD 2123 per MT in December on CFR basis.
APAC
Improved demand from the domestic market amid production disruptions in China led VSF prices to take consistently uptrend across Indian market. Reopening of school colleges, and offices coupled with festive season has increased the consumption and pushed up the prices during past three months. Thus, VSF prices rose and settled around INR 154200 per MT 1.5D Ex-Depot Mumbai in December. In addition, Grasim Industries has commissioned a new VSF line of capacity 300 tons per day that increased their total production capacity from 591000 to 700500 TPA. In China, VSF market was termed as volatile in October as the prices of available material rose sharply. There was limited availability of material in the spot market as raw material prices climbed strongly while operating rates for VSF remained sluggish which kept an upward pressure on the available material. EXW Nanjing price rose to USD 2075 per MT in October and FOB prices surged to USD 2104 per MT. However, demand dropped significantly towards H2 of Q4 which stabilized the prices after October volatility.
Europe
Wood pulp prices retreated in Q4 after showing tremendous volatility in September 2021. The drop in prices was recorded for the first time since H2 of 2020. Hence, the cost pressure over Viscose Staple Fibre (VSF) eased marginally in the market, however there were limited impacts of price reduction in wood pulp over VSF as overall cost of production increased on the back of strong energy feedstock prices. Consequently, VSF prices rose consistently throughout Q4. Imports from Asia remained sluggish owing to resolutely high freight charges and shipping costs between Asian ports and European ports. In December, VSF prices were assessed at USD 2229 per MT.
For the Quarter Ending September 2021
North America
The overall market of VSF showcased an upward trend during the third quarter of 2021 across the North American region. The resumption of industrial activities after the impact of Hurricane Ida led to the shutdown of several manufacturing units in the US Gulf Coast and compelled domestic manufacturers to boost their production moving in Q3. Demand from downstream textile manufacturers remained strong throughout the quarter. However, increased raw material and energy pricing and soaring freight costs further exacerbated the pricing trend of VFY in Q3.
Asia Pacific
The prices of Viscose Staple Fibre (VSF) witnessed a marginal increment in the 3rd quarter of 2021 across the Asia Pacific region. In India, the market sentiments showed an improved activity since the upliftment of stringent lockdown measures. Grasim Industries, the largest manufacturer of VSF and VFY in the country announced that the company will be operating at optimum capacity in hopes of a significant revival in its seasonal demand. Highlighting the persisting optimism over a revival in demand pattern, prices of VSF (1.5D) surged from USD 2156/MT to USD 2185/MT from July to September. Viscose fiber and spun yarn prices declined in China due to ample availability and low demand.
Europe
The prices of VSF rose effectively in the European region during Q3 of 2021. Traders worried as high energy costs remained a key concern that may potentially increase further in the next quarter. No relief to the high level of freight and raw material costs was seen, and the companies needed to take precautionary steps to prevent further margin erosion. In addition, reduced raw material supply are driving significant cost increases for VSF producers and negatively influencing supply chains. Prices for energy and freight which are well outside their historical ranges are further aggravating the margin compression.
For the Quarter Ending June 2021
North America
After the restoration of the industrial infrastructure in the US Gulf coast the operations at the US textile industry accelerated with the improvement of the supply chains during the second quarter of 2021. However, the pricing movement of Viscose Staple Fiber remained on uptrend as the feedstock wood pulp prices observed a hike of 40% since January 2021 and imports from the overseas remained firm with an additional support of the high freight charges. Whereas the mass vaccination programmes amplified the public movement which provided the much-needed support for the economic activities. As a result, VSF demand outlook improved in the second quarter of 2021.
Asia Pacific
In China, the Viscose Staple Fiber (VSF) market was weak throughout the second quarter of 2021, as the high-priced raw materials amidst the rising inflation rate in China, strengthened the wait and see approach amongst the spinners. Finnish Group Stora Enso suddenly announced shutdown of its wood pulp activities and pulled out from the Chinese Viscose market which ended its sales to the regional producers in Xinjiang province. The prices of VSF in the Chinese domestic market were pressured throughout the quarter with Ex-Works prices for 1.2 D and 1.5 D grades settling around USD 2515 per tonne and USD 2485 per tonne respectively in June. Whereas in India, the market dynamics were stagnant in the first half of the quarter due to the restricted activities as the second wave of COVID impacted the market activities but later the demand flourished from the textile industry.
Europe
During the second quarter of 2021, the VSF market in the European region observed a significant improvement, due to the mass vaccination drives which supported the public movement during the second half of the quarter. As a ripple effect, the market activities gained pace and the offtakes from the textile industries surged during the second quarter of 2021. The production levels remained affected at several manufacturing facilities due to surge in cost of feedstock wood pulp against the rising demand. The stated factors resulted in a significant hike in the VSF prices offered by the producers.
For the Quarter Ending March 2021
North America
The North American VSF market got severely hampered during the first quarter of 2021, as the supplies were tight throughout the quarter due to low inventories level of the key feedstock. The industrial infrastructure in the USA Gulf region was hit as several producing facilities were forced to shut down the production amid the arctic winter storm. Demand from the downstream rayon market surged due to the better offtakes from the downstream sector. The supply-demand gap widened which led to the uptrend in the pries of VSF in the North American region.
Asia-Pacific (APAC)
During the first quarter of 2021, the supplies of VSF in the Asia Pacific market were curtailed due to the strict environmental protection inspection in China which led to reduced supply of the cotton linters ahead of the spring festival. APAC VSF market started to rebound since the mid of Q4 and the domestic price hiked amid the shortage of the key feedstock. In the meanwhile, Indian traders appealed the government to remove antidumping duties (ADD) over VSF imports in the H1 of the quarter. Demand surged from the downstream industries due to the stable consumption from the textile industry. Raw material pulp is currently remained on uptrend amid continued tightness in the supply as the industry is slowly recovering from the operational cuts impended since the mid of March. Viscose staple fibre 1.5 D-EXW Jiangyin prices were assessed at USD 2500 per MT in the final week of March.
Europe
The European VSF market witnessed tight supplies in Q1 of 2021, due to the lack of feedstock amid reduced imports and transportation lag in northwest European region due to bad weather conditions. Further forth-coming ban on the single use plastic surged the demand of the VSF in European regional market whereas trade with the APAC region improved as the VSF demand reached the pre-COVID levels in some countries. As a repercussion of the hiked prices of feedstock, the price of VSF surged in the European Market.
For the Quarter Ending December 2020
Asia
Following a sturdy rebound in the textile sector due to the pickup in demand due to the festive season in Q4, offtakes of various textile materials like Viscose Staple Fiber (VSF) witnessed a significant climb in the regional market. India’s National Committee of Textile and Clothing have been urging the government to remove anti-dumping duty on VSF as the high prices of these fibers from domestic manufacturers is interfering with the profit intakes of downstream workers like garners and weavers. The move is likely to impact the commodity pricing in India in the near term. In addition, anti-China movement in the U.S. has triggered a sudden shift in the outsourcing of textiles which were previously being imported from China to India.
North America
Supply of Viscose Staple Fiber (VSF) from overseas picked up with respect to the previous quarters owing to a rebound observed in the retail sale of textiles after the ease on stringent COVID-related restrictions. Furthermore, increased demand for home textile products following the shift to work from home has caused a prominent increment in consumption for various textile products. Suppliers were heard catering imports from more than two Asian countries to avoid from the risk related to any product shortage amidst the pandemic uncertainties. By the December end, sentiments were raised after the US government along with several private officials signed a MoU to assist Asia Pacific garment workers severely hit by the dented supply chains due to Covid-led trade disruptions.
Europe
Recovery in the European Viscose Staple Fiber (VSF) market was severely hit by a sudden buzz created by the new trace of coronavirus found in UK. Partial lockdown implied in several parts of Europe, majorly UK has caused a force measure in various garments stores causing the slowdown in the sales of garments in the later half of the quarter. Furthermore, the Brexit agreement signed between European Union and UK has also concerned several suppliers over their export margins in the coming years. Traders anticipate that this deal, aiming to support UK as an independent trade identity could bottleneck the investment opportunities and supply chain in the near-term.
