VSF Is Going to Increase Soon

Recently, viscose staple fiber (VSF) market performs stably. Leading manufacturers are willing to increase the prices and the inventory mainly stays at a low level. The production and the sales are balanced. At present, 1.5D viscose staple fiber is quoted at 15,300-15,500 Yuan/ton and the medium and high end product is quoted at 15,300-15,600 Yuan/ton.

 

Although the recent market is very busy, there are still some people worries about the terminal market. They insist that the terminal market won’t be better and may causes pressure for the viscose market.

In the terminal market, the trading atmosphere is still ordinary. Since entering July, the shipping amount of rayon fabrics always stays around one million meters, which greatly suppresses the manufacturers’ actual demand for the upstream products. The covering is also weak in the downstream yarn mills. Even if the raw material had been used up, the manufacturers still buy the material according to their needs. Therefore, the production and marketing is still not satisfying for the marketers. Traditionally speaking, the peak season of the rayon market should be in April to May and September to October, but this year’s market does not show any prosperous sign in the busy season and the pale season is very long and extraordinarily dull. On this occasion, the rayon price goes all the way down and the decreasing rate is over 10%. As for the rayon manufacturers themselves, they have to cut the rayon price under the weak demand in the terminal market and their margins are barely there. At present, the rayon factories are mostly in deficit. In order to reduce the inventory, manufacturers have to cut the production and make promotions. Although the cheap price boosts the sales, the practical trading atmosphere is still pale in the market, especially in the knitting yarn market, which is suffering insufficient orders and weak procurement.

The present increment of VSF price is mainly due to the relatively low stocks. The low inventory of VSF is caused by the following two reasons. Firstly, since June, the price has dropped continuously and the manufacturers have to adjust the operating rate. For example, Manas Shun-cheun has fully stopped its producing line since June 10th and did the maintenance. Tangshan Sanyou cut off a small producing line. Jilin Chemical stopped all the staple fiber producing line during late May to early June. Nanjing Chemical only opened half of its devices. These movements release the stock pressure and give confidence for the marketers. Secondly, because the demand is not strong this year, the feedstock inventory of the downstream yarn mills is at a low level. Moreover, the mills make the covering constantly in July. The price of VSF is firm and the sales are also satisfying.

Generally speaking, the recent increasing impulsion of VSF market has not been suppressed. With the warm-up of cotton market, textile factories will be more cautious about the cotton quota, which is important for the VSF price tendency as the alternative of cotton. Besides, the VSF manufacturers are making efforts to limit the loss. Therefore, if the VSF manufacturers restart the intermitted devices on schedule, the production and marketing won’t be affected greatly and the VSF price will be likely to keep increasing steadily.