For the Quarter Ending March 2024
North America
In Q1 2024, the Viscose Staple Fibre (VSF) market in North America exhibited a mixed price trend, characterized by fluctuations with some months witnessing increases while others saw decreases. Several factors played a role in driving these price changes.
A significant factor affecting VSF prices was the cost of imports, particularly from the German market, which surged due to the Red Sea crisis. This situation contributed to a bullish trend in prices. Furthermore, announcements of rising interest rates, wages, chemicals, and environmental costs by a leading manufacturer in Germany fueled expectations of further price hikes. Despite moderate demand from downstream industries, high freight charges exerted additional upward pressure on prices. Moreover, reduced demand from downstream industries in Europe resulted in a bearish off-take of VSF from apparel and textile sectors. Throughout the period, supply remained steady, enabling manufacturers to maintain full-fledged operations.
Overall, the pricing environment for VSF in the North America region during Q1 2024 was characterized by volatility. Price fluctuations were influenced by factors such as import costs, supply-demand dynamics, and downstream industry demand. In conclusion, prices experienced a decrease of more than 3% compared to the previous quarter and a decline of more than 5% compared to the same quarter of the previous year.
APAC
The pricing landscape for Viscose Staple Fibre (VSF) in the APAC region during Q1 2024 has exhibited a mixed sentiment, with fluctuations evident in certain months. Various factors have influenced market prices overall. In South Korea, the market witnessed a significant price reduction of more than 3% in the first month of the quarter. This decrease was primarily driven by weakened support in the upstream wood pulp market and a slight decline in demand from downstream industries. To manage inventory levels, VSF manufacturers proactively lowered prices, leading to bearish market sentiment. Throughout the quarter, the market remained unstable, with notable price fluctuations. Examining the broader trends and seasonality, VSF prices in South Korea saw a decline of around 5.5% in the first quarter of 2024 compared to the previous quarter. This decline can be attributed to reduced demand from downstream industries and heightened competition from alternative fiber types. Regarding price comparisons between the first and second half of the quarter, specific data was not provided, precluding commentary on any price differences during this period. In summary, the pricing environment for VSF in the APAC region during Q1 2024 has been characterized by fluctuations, with a decline of approximately 9% in Q1 2024 compared to the same quarter of the previous year.
Europe
In the first quarter of 2024, the European market for Viscose Staple Fibre (VSF) saw a mix of pricing trends, initially declining and stabilizing, followed by a slight incline towards the end of the period. Several factors influenced the pricing dynamics of VSF in Europe. Despite a moderate to low availability of VSF, manufacturers successfully maintained smooth operations. However, the market faced challenges due to high raw material prices and increased marine freight costs, impacting the supply-demand balance. On the demand side, there was a moderate to high level of demand for VSF, driven particularly by import demands from Asian countries. In Germany, VSF prices stabilized in February 2024 after experiencing a notable decline at the beginning of the quarter. This stabilization was primarily attributed to favorable production costs, driven by a decrease in raw material prices, especially cotton. However, there were indications of a potential rebound in the following months. Overall, the pricing environment for VSF in Europe remained fluctuated, with supply and demand factors playing crucial roles in influencing prices. In conclusion, VSF prices in the German market increased by 1% in the first quarter of 2024 compared to the previous quarter, while experiencing an approximately 8% decrease compared to the same quarter of the previous year.
For the Quarter Ending December 2023
North America
Throughout the fourth quarter of 2023, the Viscose Staple Fiber (VSF) market consistently experienced a downward trend. The US VSF market showed marginal fluctuations and confirmed a downtrend due to stable supply dynamics. Economic activity in the US remained subdued in November, contributing to the overall downward trajectory.
Supply chain in the region remained smooth without significant concerns, resulting in no observed cost pressures on VSF prices during this period. Despite a previous month's price hike driven by increased production costs, the market's narrowness, influenced by a delicate balance between demand and supply, supported the price trajectory.
Concurrently, downstream manufacturers faced a slight decline in demand and weakened purchasing willingness. To address substantial inventory levels, VSF manufacturers proactively reduced prices aggressively, aiming to attract new orders. This strategic move, aimed at managing inventory and stimulating market demand, had a notable impact on the overall dynamics of the US VSF market, concluding with VSF 1.2D settling at USD 2238 CFR Texas in December 2023.
APAC
During the first half of the fourth quarter of 2023 in the Asia-Pacific (APAC) region, Viscose Staple Fiber(VSF) production capacity remained constrained, and downstream industries showed a slowdown, with a slight decrease in start-up load. While there was a mild improvement in the Purchasing Managers' Index (PMI), the market price for VSF dropped in the second half, influenced by lingering demand weaknesses in the manufacturing sector. Raw material dynamics, predominantly derived from wood pulp or plant-based sources, played a pivotal role in shaping pricing trends. VSF manufacturers responded to surplus inventory challenges with aggressive price reductions to stimulate new orders and alleviate stock accumulation. Despite challenges, the China General Manufacturing PMI showed a slight uptick in December 2023, suggesting a marginal improvement in the manufacturing sector's performance and potentially signaling a more optimistic outlook for the industry, despite the recent decline in the VSF market. Conclusively, the price for VSF dipped and settled at USD 1943/MT FOB Shanghai during December 2023.
Europe
In the European market for Viscous Staple Fiber (VSF), prices experienced a marginal appreciation in the first half of the fourth quarter of 2023. This was attributed to a 1.1% decline in industrial chemical production across the Eurozone and increased demand from the downstream textile industry as winter apparel demand grew. Improved purchasing sentiments, especially with the festive season approaching, further strengthened demand in the European market. This contrasted with the economic conditions in Germany, where export orders were down by 0.3%, and GDP was expected to contract by 0.5%, indicating almost recessionary conditions. Inflation rates, according to Statistics Bundesamt, were recorded to be down to 3.8%. In the second half of the quarter, the VSF market in Germany experienced a decline due to demand weakness in the manufacturing sector. The cost dynamics of raw materials, primarily sourced from wood pulp or plant-based origins, played a significant role in shaping overall pricing trends in the VSF market. Conclusively, the price for VSF settled at USD 2220/MT FOB Hamburg during December 2023.
For the Quarter Ending September 2023
North America
There was mixed opinion in the Viscose Staple Fiber (VSF) prices during the third quarter of 2023. During the first half, there was a decrease in downstream textile industry demand and a loss of cost competitiveness since the market for feedstock wood pulp also declined. However, the supply chain was being affected by the drop in demand for viscose staple fiber (VSF), which resulted in an oversupply of the product. As a result, suppliers had to reduce their profit margins on VSF to sell off the excess stock. Globally, the entire textile value chain was also experiencing sluggish conditions. This situation was exacerbated by factors such as the usual slow season and high temperatures, which led to decreased operating rates for yarn mills during the quarter. However, during the second half of the quarter, the industry experienced a revival in demand owing to the increased offtakes from the knit wear industries. Also, traders and distributors grappled with the difficulty of obtaining sufficient feedstock to maintain their production processes. As a result, the manufacturing sector showed modest growth, indicated by the US Purchasing Managers' Index (PMI) for September. Additionally, the Consumer Price Index (CPI), a critical inflation, increased monthly, further impacting the prices for the consumers.
APAC
In APAC, Viscose Staple Fiber (VSF) showcased mixed attitude throughout the third quarter of 2023. During the first half of the quarter, the market deteriorated due to the increasing stocks, and there was no high enthusiasm for restocking. In export market, there was lacklustre demand from the importing countries. Additionally, high risk of global recession weighed on the export market, as the demand from importing countries like Turkey, US was low. Meanwhile, the prevailing off-season for traditional industries fostered a cautious wait-and-see approach and moderated enthusiasm for procurement activities. Additionally, factors like the Asian Games in China and capacity limitations played a role in reducing the utilization rate of looms in Jiangsu and Zhejiang to just below 65%, with expectations of further declines. By the end of the quarter, VSF plants had gradually increased their prices due to tight product deliveries, resulting in a firmer trading price. Also, there was a significant improvement in orders from downstream dyeing and printing mills, and the overall operating rate had also increased to 70% due to the upcoming launch of winter clothing.
Europe
There was continuous deterioration in Viscose Staple Fiber (VSF) prices during the third quarter of 2023. The decline in the VSF prices was because of the cautious discretionary spending as the Eurozone was struggling with inflationary pressure. Due to this, the European textile industry underwent a downturn in the first half of the quarter. Additionally, there was a decrease in new orders, reflecting customer uncertainty in the market. Meanwhile, some companies reduced their workforce to cope with the situation, most were cautious about making substantial staff cuts. Furthermore, the broader Eurozone business activity faced a contraction in August 2023, with the flash composite purchasing managers' index (PMI) output index dropping. This decline was observed across both manufacturing and services sectors. However, in an effort to attract customers, major VSF manufacturers were also forced to lower their prices to encourage customers, but consumers and buyers were unwilling to reorder. As a result, there were few orders since most market participants in the viscose market decided to adopt a wait-and-see attitude.
For the Quarter Ending June 2023
North America
In North America, the Viscose Staple Fibre (VSF) price declined throughout the second quarter of 2023. This was due to low demand from the downstream home textile and apparel sectors. The supply in the region was also adequate and inventory levels were adequate. According to the data released by FRED, the Consumer Price Index (CPI) rose to 131.195 in May 2023 compared to 130.811 in April 2023, indicating that inflation in the region was high. Therefore, consumers were reluctant to spend due to high inflation. Meanwhile, the fall in the Producer Price Index (PPI) by FRED's, which also reached its lowest level, suggests that manufacturing activity in the region fell in May 2023. However, the contraction in manufacturing activity was due to a fall in new orders and smooth supply in the region, as evidenced by the falling US PMI. As a result, the price of VSF 1.2D declined and settled around USD 2280/MT CFR Texas in June 2023.
APAC
In the second quarter of 2023, the Viscose Staple Fibre (VSF) price declined throughout the second quarter. The prices fell due to the sluggishness in the viscose market. In addition, the Korean market reacted to high inventories in end-use industries by reducing imports from China. The market had also witnessed limited demand and minimal trading activity, further exacerbating the downward price trend. Data from Statistics Korea showed that the manufacturing production index rose by 3.2 percent month-on-month in May but fell by 7.5% year-on-year. The consumer price index stood at 111.13 in May 2023, up 0.3 percent from the previous month. Inline, the weakening value of the won drowned the sentiment of consumers to buy the material amid the rising inflation rate in the month of June 2023. Therefore, after considering all the above factors, the market price of VSF 1.2D was mostly on the downside throughout the second quarter of 2023, with June prices quoted at USD 2230/MT CFR Busan.
Europe
The European Viscose Staple Fibre (VSF) market followed the same trend as the Asian market, with prices remaining volatile throughout the second quarter. However, there were several factors affecting the VSF market in the Eurozone. Firstly, there was weak demand from the downstream home textile and clothing sectors. This was due to recessionary pressures, as the German economy experienced high inflation in the second quarter of 2023. Although the inflation rate came down to 6.1 per cent from over 7 per cent in March and April. However, it was high enough to weigh on consumer sentiment. In addition, consumer spending declined under the weight of inflation, further forcing manufacturers in the region to cut margins. Therefore, given the low demand and smooth product availability, the manufacturers in the region were contemplating the production cuts as the German manufacturing activity was seen declining during June 20-23. According to the Global Economy, the German PMI data dropped from 43.2 in May 2023 to 41 in June 2023. Finally, the price of VSF 1.2D was quoted at USD 2350/MT FOB Hamburg.
For the Quarter Ending March 2023
North America
During the start of Q1 2023, both the price of feedstock wood pulp and the market for Viscose Staple Fibre (VSF) increased as a result of healthy purchasing activity from downstream industries. However, with the start of the gloomy season, prices seemed to be decreasing in the second half of the quarter, consequently, despite the fact that producers allegedly had large inventories of material and were likely to reduce their margins in order to initiate sales. The demand for viscose material from the downstream apparel and home textiles sector was still low, and there was no improvement even after some relaxation in the prices. As a result, the US market for VSF 1.2D was witnessed fluctuating throughout the Q1 of 2023.
APAC
After the Spring Festival holiday, the Viscose Staple Fibre (VSF) market began to surge, and prices were already higher than they were before the holiday. However, the slow operating rate and limited stockpiles led to a hike in Viscose Staple Fibre prices during the quarter. Also, in the second half, After the Chinese New Year, the downstream industries did not experience significant inventory pressure because the clothing industry, which has a modest volume of trade, slowed or stopped production beforehand and saw balanced demand and inventory levels. In the meantime, consumers held off on placing new orders because of poor confidence, while manufacturers were in desired to empty the stocked inventories. As a result, VSF 1.2D prices remained healthy throughout the first quarter of 2023.
Europe
The German market for Viscose Staple Fibre (VSF) witnessed an uptrend in its pricing, as demand from downstream textile industries was healthy during the first half of the quarter. However, the beginning of the dreary season appeared to have lowered demand. As a result, the demand for Viscose material from the downstream apparel and home textiles sector was inflexible, and there were no signs of change in the near future, despite the fact that producers allegedly had large inventories of material and were likely to reduce their margins in order to start sales. Thus, with the easing inflation rate, the German market for VSF 1.2D seemed uninteresting at the end of the quarter. The improvement in supply-demand imbalances contributed to the decline in manufacturing costs. As a result, the market for VSF showed fluctuation in its pricing
For the Quarter Ending December 2022
North America
The price of Viscose Staple Fibre decreased throughout Q4 because of the unfavorable market conditions and low commodity contract values throughout the quarter in 2022. The price of VSF 1.2D CFR Texas hovered at USD 2260/MT, dropping 2% monthly. Just two of the several factors that led to the decline were the excess product supply and the weak demand in both the domestic and international markets. Moreover, pessimistic regional VSF buying sentiments contributed to the region's downward price trend. Additionally, the price of feedstock Wood Pulp decreased due to a significant domestic upstream supply, which directly influenced the downward trend in Viscose Staple Fiber Prices.
APAC
The price of Viscose Staple Fiber 1.2D declined, and the price was 2015/MT FOB Shanghai during December 2022. However, the trading of new orders was normal with the dull enthusiasm of downstream industries. The operating rate of the Viscose Staple Fiber industry was maintained at about 60%, and the overall low operating rate may continue under the loss operation of manufacturers. According to the market sources, the reduced operating rate was mainly on the verge of low demand from downstream apparel, home textiles, dress materials, knitwear, and non-woven sectors. Meanwhile, due to the rigorous Zero-Covid Policy, small businesses have found it difficult to meet their production goals to guarantee supplies. The Shanghai Shipping Exchange (SSE) also unveiled those exports from Shanghai went down 7.2% in October.
Europe
Due to adverse market mood and low commodity contract values in Q4 of 2022, the price of Viscose Staple Fibre fell throughout the quarter in Europe. The price of VSF 1.2D FOB Hamburg was estimated to be USD 2350/MT, with a monthly decline of 1.7% during November. The level of just-in-demand procurement was still maintained downstream, and inventories increased by a small amount. The terminal request did not improve, and the downstream orders for rayon yarn did not go as planned. Meantime, the domestic market's willingness to accept goods was not very high, and the demand side's performance remained sluggish.
For the Quarter Ending September 2022
North America
Prices for Viscose Staple Fiber decreased in the third quarter of 2022. The factors that ruled the market were the excess supply of products and the weak demand from domestic and international markets. The falling price trend in the region was also influenced by the hostile regional buying atmosphere. Additionally, the price of feedstock Wood Pulp decreased due to a significant domestic upstream supply, which directly influenced the downward trend to continue. Furthermore, a sluggish market, higher interest rates, weaker growth, and a deteriorating labor market aided the lowering of VSF prices. On the US Gulf Coast, port congestion and logistical challenges had worsened the supply dynamics, weakening the market sentiment.
APAC
The third quarter of 2022 witnessed a price decline of Viscose Staple Fiber. The primary cause of this price change was the shifting cost pressure due to decreasing feedstock wood pulp prices. In the meantime, VSF demand struggled as some fabric mills started to reduce production due to reduced sales with fewer inquiries from the downstream apparel, home textiles, dress materials, knitwear, and non-woven enterprises sector. The stringent zero Covid policies, including the lockdowns of major cities, had crippled demand for imports in China. In August, VSF's operating rate decreased to 55%, and the average run rate for the downstream sector was also around 40%. Most plants had decreased their operating rate during the second half of Q3 due to the high temperature and power rationing difficulties.
Europe
Due to weaker feedstock and slower customer demand, Viscose Staple Fiber prices ceased their upward trend in the third quarter of 2022. Lowering River Rhine Level, disrupted shipping, and Economic slowdown has led to weaker market sentiments. Congestion at the German ports of Bremerhaven and Hamburg, which had developed over the previous few months of this quarter, had hampered the product supply internationally. At the same time, ample product availability and sluggish demand in the domestic markets contributed to the ongoing downtrend. Additionally, the third quarter saw a decrease in prices in the domestic market due to high inflation, which kept demand below seasonal expectations, leading to overflowing inventories in the region.
For the Quarter Ending June 2022
North America
Viscose Staple Fibre prices rose in the first half of Q2, which reduced in the second half. The changing feedstock market could justify these price changes. Feedstock wood pulp supply remained tight in the regional market, owing to the disrupted supply amid China's lockdown. The US mainly imports from China and Germany. Therefore, as fuel and freight prices rise, so do apparel, home textiles, dress materials, knitwear, and non-woven products. In addition, the labor shortage disrupted the product's supply, constituting the increment in VSF value by 1.2% in the H1 of the second quarter. Thus, considering the aforementioned reasons, the price for VSF 1.2D flourished and was assessed around USD 2261/MT CFR Texas in the month of May.
APAC
In China, VSF prices rose in the first half of the second quarter, aided by the consistent volatile feedstock market. Rising import inflation, increasing demand in the international market, and soaring logistics cost further supported the increasing price trend. It could be observed that the price of raw material wood pulp is higher, supported by the substantial energy increase. Downstream demand from apparel, home textiles, dress materials, knitwear, and non-woven fabric increased earlier, subsiding in the second half. Consequently, the price for VSF 1.2D settled at USD 2305 FOB Shanghai respectively. In Contrast, the Indian market also rose in the first half of Q2, which was reduced in the second half by 4%. In addition, a particular scheme such as Scheme for Integrated Textile Parks (SITP), as well as revisions on the freight charges on textiles by the Indian government, had boosted the textile industry, driving the market for viscose staple fiber in India. Grasim Industries Limited had also increased VSF prices by around 6 % as of the previous rates. To conclude, the market was volatile in the Indian and Chinese markets, and the price for Indian VSF 1.2D settled at USD 2395/MT Ex-Mumbai in June 2022.
Europe
In Europe, the price for Viscose Staple Fibre increased by 2% and then dipped due to increased feedstock wood pulp prices. But, as the demand seemed sluggish from downstream apparel and home furnishing sector, VSF price dropped. In the Q4FY22, Grasim Industries' revenue from wood pulp and viscose staple fiber was up 45.79%. The global demand for textile products, especially in Europe, also led to a positive demand environment for viscose staple fiber (VSF). The supply chain disruptions also drove the rise in the VSF prices because of COVID-19 restrictions and the ongoing conflict between Russia and Ukraine. Therefore, the domestic VSF prices increased in line with soaring feedstock prices and improved demand in the first half. Conclusively, the price for VSF during May settled at USD 2362/MT FOB Hamburg.
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
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.
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.
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.
