After the Spring Festival, spunlace nonwovens mills have gradually resumed production. Taking major production areas such as Jiangsu and Zhejiang as examples, most plants restarted operations from the 8th to the 10th day of the first lunar month. Given the large number of migrant workers in Jiangsu and Zhejiang, it will take another 3-5 days to reach full capacity. Current industry operating rate is estimated to have recovered to around 45%.
VSF and PSF quotations have generally rise after the Spring Festival, laying a foundation for the strong start of the spunlace nonwovens market. VSF offers have increased by 200-300yuan/mt. However, due to concentrated pre-holiday procurement by fabric mills, the feedstock inventory remains ample and is expected to be consumed until late Mar to early Apr, resulting in limited transactions at present. Supported by crude oil and raw materials, PSF trading prices also rose by more than 100yuan/mt.
Amid strong raw materials and positive commodity sentiment, some spunlace nonwovens mills have raised their quotations. For instance, major manufacturer in Xinjiang increased prices of 100% viscose cross-lapping nonwovens by 100yuan/mt to 17,100-17,200yuan/mt compared with pre-festival levels. Similar to VSF, spunlace nonwovens mills secured substantial orders before the festival, with high pre-sales volume. Most plants are focused on order delivery after the holiday. New orders are expected to be placed around International Women's Day, but demand will gradually weaken afterward.
Although raw material costs remain firm, there is still considerable pressure for cost increases to pass through to nonwovens prices. Intense industry competition persists at present. The average annual operating rate last year was only around 65%. Overcapacity continues to cap price flexibility, especially with significant new capacity scheduled to come online in Xinjiang this year.
