VSF prices gradually rise, with weak upward momentum of rayon yarn

Recently, VSF has gradually strengthened, which has caused some downstream participants of the industry chain to express their incomprehension, because the downstream market is not good, and rumors of fabric mills reducing their operating rates are often heard. In addition, there will be a traditional off-season lasting 1-2 months, so there are many people who do not agree with the price increase of VSF. Judging from the trend of the past 7 years, it is indeed rare to start price increases in mid-Jun, of which 5 years have fallen and 2 years have risen. But now is different from the past. VSF has changed its fundamentals for the better by "expanding applications and compressing capacity".

Against the background of the continuous increase in the number of vortex spinning machines and the continuous increase in non-woven applications, the consumption of VSF has also continued to increase. In addition, this year, due to the serious loss of cotton yarn, there are also cases of switching to the production of rayon yarn or blended rayon yarn, so the supply of VSF has always been slightly tight. The large increase in vortex spinning machines has increased the consumption of VSF, but enhancing the competition in the yarn market.

After the price of VSF rises, rayon yarns have partially followed up, mainly concentrated in vortex-spun and open-end yarn. Since traders and weaving mills do not have bullish expectations for the future market, they are not eager to chase up, and mainly purchase yarns on need-only basis, leading to a rapid decline of trading volume after price increased. The prices of ring-spun, compact siro-spun and siro-spun yarn basically remain stable, and the downstream is also relatively resistant to price increases. In addition, compact siro-spun and siro-spun yarns are under minor inventory pressure due to poor sales, and the stocks of some yarn mills are still on the rise, so there is no confidence in price increases. Because the price increase of raw materials is difficult to transmit to downstream sector, the processing fee of yarn mills is compressed. In addition, the extra high temperature fee and electricity fee in the later summer will also put more pressure on yarn mills.

Because the fundamentals of VSF are good, there is still a high probability of price increase in the later period, but whether the yarn mills can pass on the price increase depends on the operating rate of the fabric mills, and the probability of traders hoarding up stocks is relatively small. If the fabric mills can maintain the current operating rate, the yarn mills may try to force the transmission to downstream sector.