In March 2025, Viscose Staple Fiber (VSF) prices witnessed a declining trend in the global market. This is primarily due to the uncertain market conditions. Dampened market sentiments due to the significant tariff imposition by the US government, resulted in overall sluggishness in the VSF sector.

In United State market, VSF prices remained weak during the period and depreciated by 2.0% during the month. The main contributors were the sluggish demand and the weak consumer confidence. Moreover, domestic inventory level remained up during the period coupled with the smooth import flow from the overseas market, despite the significant tariff imposition on the Chinese goods. Market insight revealed about the shift in trade pattern, where US increased its import from Bangladesh. In the early two months of 2025, imports surged nearly threefold.

Adding to the complexity, weakness in the US retail sector further influenced the market conditions. Following a significant drop in January, February witnessed a 0.2% improvement only, weaker than expected. This weakness in the retail sector signals a potential deceleration in consumer spending, weighing on the VSF market growth.

Jerome Powell, federal reserve chairman recognized that the tariff has played a significant role to elevate the inflation, which currently stands at 2.8%. Consumer confidence remained low, and it is expected to further impact the discretionary spending negatively, including apparel and textiles. Although tariffs have affected pricing dynamics, they are not high enough to bring textile manufacturing back to the United States. This is because making textiles requires intensive labor operation and has low profit margins. Since the VSF industry heavily depends on global trade, it is strongly affected by these economic changes.

The European market followed the same trend observed in the US market. VSF prices depreciated by 2.8% by the week ending March 21 in the German market. Sluggish demand conditions and the weak export level were the main factors which resulted in inventory accumulation. This oversupply and sluggish demand condition mainly exerted the pressure on the VSF pricing.

Across the Asian-Pacific market, VSF prices mirrored the same trend. In China, VSF prices remained under pressure and dropped by 0.85% during the period. Weak export coupled with the US tariff policies mainly shaped the market dynamics. Market participants noticed that the early two months of 2025 were a challenging period for the country’s textile and apparel industry. Chinese market remained underperformer compared to the other key markets. This is mainly due to the slowdown occurred by the Chinese New Year festival slowdown and trade tension due to US tariff, weighed in the Chinese exports, including VSF.

General Administration of Customs revealed that the China’s cumulative exports for textile, garments and accessories were USD 42.883 billion in January-February 2025, a 4.53% decline from the last year at USD 44.921 billion. Weak demand for textiles in the global market, and the trade war, continue to disturb the market conditions.