Can rayon grey fabric follow the step of rising VSF?

VSF prices are going up recently and the increase has been more than 2,500yuan/mt this year. Rayon yarn prices have also followed up, though the increment is smaller. However, rayon grey fabric market lacks upward momentum with prices remaining largely unchanged.

The performance of VSF market is eye-catching this year with prices rising steadily under the influence of Ukraine-Russia conflict and repeated COVID-19 infections in China. Large-sized high-end VSF plants further raised offers by 300yuan/mt early this week and the lower price of medium-grade VSF was also adjusted up to 14,700yuan/mt, close to the high point at the beginning of 2021. Rayon yarn price also gained ground by more than 300-500yuan/mt driven by cost, with some rising by more than 1,000yuan/mt. Among them, open-end and vortex-spun yarn kept strong, while ring-spun yarn saw smaller increase. As for rayon grey fabric, some products were quoted up by 0.05-0.1yuan/meter due to continued rising cost, while trading prices are hard to improve.

VSF plants are becoming reluctant sellers with fast increase of feedstock cost and coupled with good demand on the market, VSF plants could keep pre-sales of more than 1-month production, so they are eager to push up the price. Rayon grey fabric price is hard to rise because weaving mills have seen slow sales with fewer new orders this year, and they are forced to produce ordinary products as stocks to maintain the operation of mills and stability of workers. The inventory is mostly around 30 days, with the higher more than 40-45 days. Therefore, the price of grey fabric is suppressed by high inventory.

Rayon grey fabric mills now give priority to sales and absorption of stocks when they are under big inventory burden and there are fewer orders, but the price is expected to move up after the stockpiles are consumed.