Price difference between cotton and other fibers narrows slightly

With the quick rise of cotton prices this year, the price difference of cotton with PSF and VSF enlarges gradually, especially during Apr and Jul, the price differences expand obviously, and in Aug, cotton prices are in adjustment, and the price difference with other fibers is also relatively flat, having no further expanding trend. Despite of the flat price difference, it is still above the average value, which provides the driving force for the fiber shift.

Looking from the chart, the price difference between VSF and PSF is relatively steady, and narrows slightly recently; price difference of cotton with other fibers is also in a steady state. Though the price difference narrows slightly recently, it remains above the average level.

The substitution of other fibers for cotton is obviously seen in the second half year of 2021 and the first half year of 2022 last time, lasting around a year, and from late May, 2023, the price difference of cotton and other fibers gradually expands to be above five-year average, and has lasted for three months. In terms of the short-term trend of cotton, PSF and VSF, this price difference may continue to sustain for a period, and whether the price difference will enlarge further shall pay close attention to the cotton prices. Viewed from downstream profits, cotton yarn, polyester yarn, rayon yarn and major blended yarn profits are all unfavorable, and cotton yarn faces the highest losses, followed by polyester/cotton yarn. Yarn with the proportion of cotton all faces unfavorable profits, so spinners are not active to shift production; while from the angle of downstream pressure and cost reduction and, the substitution is seeing. Later, keep on monitoring the price difference change and operation status of other products.