Rayon yarn market becomes more vigorous recently

Vortex-spun rayon yarn witnessed large transactions recently, and the offers of mills gradually recovered as the inventory pressure eased. The trades of other varieties also improved to a certain extent. In addition, sales of yarn products made of cotton or polyester also turned better. It seemed that with the relaxation of epidemic control policies, the market was again injected with vitality.

In terms of price, rayon yarn was indeed attractive at the current price. Vortex-spun, siro-spun and compact siro-spun rayon yarn suffered losses of 2,000yuan/mt, and those of ring-spun rayon yarn were at 1,000yuan/mt. The case of open-end rayon yarn was relatively special. Firstly, it had greater cost advantage. Secondly, logistics in Xinjiang hadn’t fully recovered, thus the delivery of goods remained unsmooth. The current low price was favored by downstream textile mills and traders. This, coupled with the low feedstock inventory of downstream mills at the year end, and the restored market confidence after the eased epidemic control, had led to large amount of procurement from traders who had been in a low profile for over half a year.

On the bright side, the capital pressure of yarn mills alleviated after yarn inventory was significantly depleted. Therefore, whether spinners decided to have holidays in advance or not, their purchases of feedstock would be more promising. Currently, the market was waiting for the new low prices of VSF, thus it attracted more attentions recently. If large transactions were concluded like previous years, then the market after the Spring Festival holiday was something to behold. It’s particularly true for rayon yarn, the profit of which was supposed to grow amid the stable feedstock cost. 

But at the same time, it's also necessary to pay attention to the market changes in the months around the Spring Festival. For plants operation, mills that reduced and suspended production previously were more likely to see a rebound in operating rate. However, yarn mills that basically held steady the operation or had more migrant workers would close in advance as planned due to the losses pressure and the early-return of workers. In general, overall operating rate of rayon yarn mills rebounded recently, yet market players should still pay attention to the work resumption of yarn mills after the Spring Festival.

The consumption of textile and apparel was affected by less income and outings, and was expected to face great challenges in recovering in the short term. Besides, the inventory of brand owners were yet to be consumed, thus low price competition caused by sales pressure would continue to exist. But anyway, there’s something to look forward to.