Viscose fiber prices have stayed stable in the last seven days in China but could actually decline in the coming weeks over a lack of demand and excess production and inventories. There is however a limit down which will trigger a fall of operating rates.
Viscose staple fiber prices have stayed unchanged in the last seven days in China and Pakistan, reflecting the current stability of the market.
VSF prices could however decline in the coming weeks, over a relatively weak demand and more importantly higher production capacities this year.
From 4 million metric tons in the past year, capacities have risen to 4.7 million in 2019, after 700,000 MT have been actually added in the last quarter 2018.
Viscose staple fiber have therefore continued declining until the end of March when they have bottomed out over a fall of inventories.
Prices could however continue dropping, in line with a slight decline of raw material costs in the past weeks.
China’s viscose industry is currently experiencing a loss of 1,500 to 2,000 yuan per metric ton which could be a record level.
Although 1.5D VSF prices could fall as low as 12,000 yuan, producers are widely expected reducing operating rates to avoid prices dropping below this level.
A stabilization at 12,000 yuan would therefore not surprise analysts.
This average level actually hides a wide diversity of price policies amid companies which are very different in terms of size, products and ownership, meaning that the market could continue experiencing some price volatility in the coming months.
Source: Emergingtextiles