Oct 22rd, Weekly Report of VSF

 Market Review

    In this week, VSF prices continued to decline, the main quotation of middle-end products was 14,300 Yuan/Ton, and high-end products was 14,500-14,600 Yuan/Ton, which dropped 300 Yuan compared to last week. The low price transaction news appeared frequently, leading the whole factories lack of operating confidence, although in the second half week, the downstream purchasing atmosphere was rebounded compared to previous time, mostly purchasing acts depended on demand, the feedstock stockpile enthusiasm was not high, and the market wait-and-see mood was concentrated. At present, the stock pressure of manufacturers was not big.

    In perspective of upstream market, short velvet and cotton pulp market was weak. Influenced by the weak transactions, the short velvet price was dropped below 3,000 Yuan/Ton; Due to the low capacity, reasonable stock level, high cost support, cotton pulp price was difficult to change. Influenced by upstream VSF price, the downstream rayon market prices continued to loose, the quotation of weaving 30S was 18,400 Yuan/Ton in Xiaoshan and Shaoxing, which fell 200 Yuan/ton compared to last week.

Upstream and Downstream Situation Analysis

    In the perspective of upstream, in this week, short velvet market price dropped and the market demand was insufficient, and the main transaction price dropped. The quotation of short velvet in Shandong was 2,800-3,000 Yuan/Ton, long velvet was 3,500 Yuan/Ton, and cotton pulp factories purchasing atmosphere was sluggish. The trading atmosphere in cotton pulp market was not improved, influenced by continuing dropped VSF price, the market bearish mentality was strong. But overall stock pressure was not big in the present market, pulp factories price was in stalemate, the mainstream price was 7,500 Yuan/Ton, but downstream acceptance performance was common and the actual trading atmosphere was weak.

    In the perspective of downstream, in this week, rayon market price dropped slightly. At present, the purchasing atmosphere of rayon market was weak, leading the price dropped apparently and the production enthusiasm of weaving factories reduced greatly. The factories turned to consume stock and became more cautious to purchase the raw materials of rayon. In addition to the dropped upstream VSF price, the rayon yarns price dropped further, now the quotation of weaving 30S was 18,400 Yuan/Ton in Xiaoshan and Shaoxing, the 30S price in Shandong was 18,500 Yuan/Ton, and 36S price was 18,200 Yuan/Ton, the market transaction atmosphere was light, and the market bearish mentality was strong.

Market Outlook

    At present the VSF market price was in chaos, the low price transactions started to increase, manufacturers bearish mentality was strong, although the stock of downstream yarns factories was low, but many purchasing plans were delayed. The market overall trading atmosphere was common, it is estimated the VSF lacked of good news support in short-term and the price will continue to decline.