Demand for the Viscose Staple Fiber (VSF) and rayon yarn is booming in Asia. According to a subscription based ChemAnalyst predict, this will mostly likely to lead to rise in the prices of VSF. This price surge will be driven by an anticipated demand surges from downstream industries post-holidays, coupled with potentially tight VSF availability.
To meet this unforeseen demand, producers are launching and cutting short their annual holiday, hinting at their robust operational efficiency and market responsiveness.
Echoes of a similar boom in August 2023 resonate. Back then, the industry also defied seasonal lows, boasting high utilization rates and remarkably low inventory levels. This trend continues, with VSF stockpiles dropping from 28.5 days in July 2023 to just 22 days today.
Even with downstream industries anticipating a shorter-than-usual February break, analysts predict continued positive performance for VSF post-Spring Festival. Traditionally, February-April is a peak season fueled by strong demand, and this year's availability of loans and reduced financial pressures add to the positive outlook.
However, caution remains amidst the domestic cheer. Global economic uncertainties loom large, with the World Bank and IMF projecting a bleak 2024. While China's domestic demand seems to be recovering, price acceptance across sectors hasn't improved significantly. A cautious, gradual approach is recommended to navigate these potentially challenging global headwinds.