In early October 2024, the U.S. viscose staple fiber (VSF) market continued to exhibit stability, maintaining steady prices following surge in early September. The CFR prices for VSF in the U.S. showed minimal fluctuations, largely due to subdued demand and consistent import prices from the Asian market. This stability is primarily attributed to robust production levels in China, where VSF production has been supported by low feedstock costs, ensuring ample supply and limiting significant price changes in the market.

The Chinese VSF industry has been operating at a high capacity, with manufacturers running at an average daily operating rate of nearly 85%. However, equipment in Xinjiang, which had been out of operation for maintenance, has not yet resumed, contributing to an overall high market supply. Despite low inventory levels among VSF manufacturers in China, the constrained on-site supply is creating some potential upward pressure on prices. Analysts believe that the VSF demand in the U.S. market may experience marginal declines in the coming weeks, but rising freight costs due to global disruptions could influence price adjustments, particularly for exports from Asia.

In the broader U.S. economy, business activity in September 2024 remained stable, although inflationary pressures persisted. Prices for goods and services rose at their fastest pace, signaling potential inflation risks on the horizon. September's retail sales data pointed to solid economic growth during the third quarter, but uncertainty surrounding the upcoming November presidential election tempered business confidence and raised concerns about future economic stability.

The apparel industry, a key sector for VSF demand, has been facing a downturn. Shifts in consumer behavior, driven by inflation and economic uncertainty, have contributed to a decline in demand for non-essential items, including apparel. Consumers, particularly those from lower-income households, are increasingly prioritizing essential purchases over discretionary spending, such as clothing. Retailers have reported weak apparel sales, and this cautious spending behavior is directly impacting the demand for VSF in the apparel sector. Data from the U.S. textile and apparel market shows that imports of textiles and apparel declined by around 2.4% in the first seven months of 2024. A closer look reveals an approximate 4.5% drop in apparel imports. This shift in consumer preferences and supply chain adjustments is shaping the overall market dynamics for VSF in the U.S.

In the logistics sector, freight rates from Shanghai to Europe and the U.S. experienced notable declines in early October 2024. Freight costs from Shanghai to Genoa dropped by 9%, while rates to New York saw a 2% reduction. However, the ongoing strike by the International Longshoremen’s Association (ILA) at major U.S. container ports is expected to disrupt shipping schedules, leading to rising freight costs in the coming weeks. The strike has already left many ships and containers stranded, further straining global supply chains and causing delays in U.S. chemical trade, including VSF. These disruptions could lead to a potential surge in transportation costs, which may further impact the pricing trends of VSF imports in the U.S.