BEDFORD, MA, March 22, 2021-

By Patrick Cavanagh, Economist, Fiber

In the third quarter of 2020, viscose staple fiber (VSF) and viscose pulp prices in China fell to historical lows in inflation-adjusted terms. Prices have since rebounded, with VSF (excluding VAT) climbing $934/tonne (88%) through February and imported hardwood viscose pulp prices increasing by $322/tonne (53%). Pricing data through mid-March shows further appreciation, with VSF reaching its highest level in four years and hardwood viscose pulp reaching its highest in more than eight years. Despite these milestones, the pace of the rally slowed in early March. Compared to the $280/tonne month-over-month increase for VSF in February, March prices are so far up $140/tonne and have even decreased slightly in renminbi terms. Similarly, viscose pulp prices were up $50/tonne in early March, compared the $155/tonne gain registered in February. Besides the marked deceleration of price increases, other signs are emerging that could point to a near-term inflection point in the key Chinese viscose market.

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