Viscose industry chain waiting for downstream feedback

After the Spring Festival, prices in various sectors of viscose industry chain (VSF, rayon yarn, and rayon fabric) have increased, with the increment ranging from 1% to 4%. Among them, VSF has experienced the largest increase in the trading price, and the increase in the quotation of rayon yarn is also significant. However, despite the strong start, the overall market trading atmosphere is somewhat quiet, and the high-count yarn, which was booming last year, does not show a tense trend at the beginning of this year.

Under normal circumstances in previous years, the entire market would gradually become active after the 15th day of the first lunar month, as various sectors of the industry chain gradually resume normal operations and procurement and sales gradually recovered. The excessively quiet state now also raises concerns among industry professionals about future demand.

The current state of being too quiet is mainly due to two reasons. First, the demand has not exceeded expectations, and various sectors of viscose industry chain are not chasing up actively, but digesting the stocks instead. Downstream and end-user demand remains lukewarm. Second, prior to the Spring Festival, all sectors of viscose industry chain had sufficient pre-sales volume, and the demand for purchasing raw materials after the holiday is not significant. In addition, the price increases before the holiday were relatively high, resulting in greater pressure for downstream price increases. In summary, the demand is slightly insufficient, but we cannot draw a conclusion that demand is weak in a hurry and further observation is still needed. Against the backdrop of sufficient pre-sales in various sectors, the short-term viscose industry chain is still expected to be stable to stronger.