During the second half of November 2024, the global Viscose Staple Fiber (VSF) market experienced stability in pricing, driven primarily by low production costs and subdued consumption across major regions. This trend reflects broader economic concerns and fluctuating feedstock prices, impacting the dynamics in global market.

In Europe, particularly in Germany, VSF prices remained stable during the second half of November, settling at USD 2350/MT FOB Hamburg as of November 29^th. The primary factor behind this stagnation was the declining production costs and weak demand from end-use industries, largely influenced by economic uncertainties in the Eurozone.

VSF Feedstock dynamics played a crucial role in this trend. Wood pulp inventories continued to accumulate in European ports, adding pressure to the market. Meanwhile, caustic soda prices in Germany declined by 3.9%, contributing to lower input costs for VSF manufacturers. Additionally, inflation in the Euro area was estimated at 2.3% in November, up from 2.0% in October, according to Eurostat. These economic indicators suggest a cautious approach from downstream industries, further limiting demand for VSF.

The Asian VSF market, particularly in China, also saw flat pricing during the second half of November. This stability was attributed to low production costs and limited demand from both domestic and international markets. Wood pulp, a critical feedstock for VSF, exhibited mixed price movements. While softwood pulp prices initially rose and then declined, hardwood pulp prices continued a weak downward trend throughout November. Domestic wood pulp production increased, and high import volumes led to significant supply pressure in the market. The paper mill sector, a major consumer of wood pulp, showed limited offtake during this period. Similarly, caustic soda prices in China declined by 5.7%, driven by ample inventories and weak demand from end-use industries.

The terminal textile sector in China underperformed as autumn and winter orders concluded, and raw material stocking remained lackluster. Despite this, China’s textile and apparel exports demonstrated resilience. According to the General Administration of Customs, exports from January to October 2024 totaled 1.76 trillion CNY, reflecting a 3% year-on-year increase. Textile exports grew by 5.8%, while apparel exports rose by 0.7%. Notably, exports in October alone surged by 8.5% compared to the previous year, providing some optimism for the VSF market.

The VSF market in the United States remained balanced during this period, with prices holding steady at USD 2040/MT CFR Texas. This stability was primarily due to steady import volumes from overseas markets and the low domestic production costs. Feedstock prices showed minimal fluctuations, with wood pulp prices remaining unchanged. However, caustic soda prices declined by 2.17%, further easing production costs. Further, according to the US Bureau of Labor Statistics, the apparel manufacturing index declined by 0.2% in October 2024 compared to the previous month, indicating weaker demand in the textile sector, which aligns with the flat VSF pricing trend.