Viscose yarn prices are now falling in China, as a result of a sharp decline of viscose fiber prices in the past two weeks. Yarn import prices are also dropping, due to the rise of the yuan in the past period.
100% viscose yarn prices are now falling in China, in line with the sharp decline of viscose staple fiber prices in the current period.
VSF prices have lost 650 yuan per MT or 5% in a single week. Spun viscose yarn prices have declined 430 yuan per MT or 2.3% in the meantime.
In theory, gross margins are rising at spinning mills as far as 100% viscose yarns are concerned.
In reality, spinners will be forced to further lower their prices with a slight delay, after they will have digested fiber inventories which have been purchased at higher price levels.
The fall of viscose yarn prices is already observed on the Qianqing’s market and in Shaoxing (see below tables).
Cotton yarn prices are staying very firm by contrast, as cotton fiber prices slightly increase.
Yarn production is progressively rising with operating rates being raised at spinning mills.
Inventories are however falling which is a good sign for the coming weeks and months.
Cotton fabric production is similarly recovering in China.
Yarn import prices have further risen in dollar terms, however declining in yuan terms, due to the current strength of the Chinese currency.
Imports are rising, with inventories actually piling up at consigned warehouses.
Demand for foreign yarns should weaken in the coming months, as a result.
Uncertainties continue also prevailing with the end of trade negotiations with the United States not yet in sight.
Inventories are therefore being kept at low levels, in order to reduce risks.
Source: Emergingtextiles
