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Insight | Time: Feb 23 2021 10:27AM
Fiber prices extend higher: chemical fibers catching up with cotton and VSF
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Overall fiber market witnessed an uptrend start after the Lunar Chinese New Year holiday, apparently earlier than past years.

On Feb 22, prices of many products moved up compared with Feb 19, the first trading day after Spring Festival, and the increment of VSF, PFY, PSF, spandex, polyester yarn and rayon yarn outpaced others. In fact, this round of increase could be described as the continuity and fermentation of the pre-holiday market. Prices of PSF soared by 20% compared with 1 month ago and those of spandex 40D surged by as high as 8,000yuan/mt.

Increment of PSF and PFY seemed to be too strong, while recent uptrend of chemical fibers such as polyester fiber was more like a catch-up.

From the angle of tempo, cotton prices touched bottom in Apr 2020 and started an upward trend since the National Day holiday. VSF prices bottomed out in Q3 2020 and rapidly extended gains at the end of 2020. Polyester fibers performed relatively milder, which rallied in end-2020 and gradually chased up afterward.

Prices of PSF and PFY hit the level before the pandemic after this Spring Festival, while prices of cotton and VSF have exceeded the level in 2019.

Peripheral commodity tendency exerted more significant effect on the value and tempo of fibers. Prices of US cotton has hiked by around 30% compared with the peak appeared before the COVID-19, while those of crude oil just reached the peak before the pandemic.

Therefore, in the context of different costs, cotton textiles and viscose markets outperformed compared with chemical fibers in 2021. Spinners apparently delayed their holiday schedule for the Lunar Chinese New Year and they were earlier in restarting. However, downstream market of chemical fibers changed little compared with past years in terms of holiday plan and post-holiday resumption.

Spandex, as a small product, was an exception, which possessed own supply and demand features. Prices were highly boosted due to support from supply and demand and upstream cost.
[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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