Viscose fiber prices have further dropped in the last seven days, although less sharply falling than polyester. Demand for viscose could therefore be negatively affected in the coming period, when raw material costs are not really dropping in addition.
Viscose fiber prices have continued falling in the last seven days with benchmark 1.5D VSF losing 200 yuan per metric ton or 1.7%.
Although continuously declining, viscose prices are less sharply plummeting than polyester prices.
As a result, viscose is increasingly more expensive than polyester, although the price difference with cotton is not moving (see below table).
Demand for viscose is already depressed, partly due to seasonal trends, with buyers waiting for a rebound of prices before ordering large quantities.
Operating rates are relatively low at about 75% in China and could further drop in line with the current fall of margins.
Raw material costs are not really dropping, as production of cotton linter has been reduced in the past months, therefore supporting cotton pulp prices.
Wood pulp prices are dropping however, which could limit the fall of margins at most recent viscose plants using wood rather than cotton pulp.
VSF prices could stop falling in the coming weeks, when production will have further dropped at fiber plants and processors will need replenishing their stocks.
Margins are apparently rising at spinning mills as far as 100% viscose yarns are concerned.
Source: Emergingtextiles
