Could VFY price spurred by the exports?

VFY market was mainly stable in Jan, but trades were gradually decreasing with the coming Spring Festival in early Feb. The traders and weaving mills generally started to have a holiday at the end of the month after completing the pre-holiday stocking up.

The market was gradually closed starting the first half of Feb due to the influence of Spring Festival, but VFY plants maintained stable operation during the holiday and there was still support from pre-sales, so VFY plants were not under big pressure. Due to tighter supply of some specifications, the producers gradually quote dup by 500yuan/mt after the holiday, and the increment started to be implemented in the transactions, thus the trading prices also improved. At the same time, the supply in Chinese market was increasing with the normal operation of Xinxiang Chemical's new unit and trial operation of Jilin Chemical Fiber's new facility.

In export market, the sales mainly depended on some certified brands. According to customs data, VFY (H.S. code: 54033190) export of China in the first two months of 2024 slightly increased by 1.64% year on year to 13.792kt. The export price averaged at $5,570/mt, which was 4.87% lower than the same period of 2023.

India, Pakistan and Turkey are still the top three destinations of China's VFY export, accounting for more than 80% of the total volume. As for origins, Xinxiang Chemical Fiber, Jilin Chemical Fiber and Yibin Grace are the major exporters in China, taking up more than 90% of the total volume.

VFY plants are not under big inventory burden and there is some support from the rising raw materials. The market sentiment and expectations are better in the short run, and due to tighter supply of some specifications of VFY, the price may be flat to higher.