Chinese chemical fibre sector on road to recovery

25 Sep '09

2 min read

Industry analysts believe that recovery of the Chinese chemical fiber industry seems relatively clear now, as, Viscose Staple Fiber (VSF) industry has entered a range of higher profit, while spandex industry will have a greater room for growth, being driven from exports.

Chemical fiber industry has walked out of depression, since the second quarter and the recovery of VSF has been faster than those of other fibre varieties. Viscose staple fiber realized 24 percent of gross margin in the second quarter, close to 27 percent, its best performance in 2007.

Polyester performance has not been so good, but its performance also exceeded expectation. Spandex has witnessed a smaller decline in prices, since the onset of its off-season and in the process touched lows of 46,000 Yuan per ton.

Spandex price has shown an upward trend since the end of August and as per estimates, stocks of spandex industry will only last 10 days or less, while reasonable inventory levels maintained by enterprises, in off-season were usually of about 1 month in previous years.

Prices of spandex in China are projected to rise steadily in the future and are expected to reach 50,000 Yuan per ton, against 48,000 Yuan per ton, prevailing currently.

Chinese Spandex exports in July were over 3000 tons, up 33 percent year on year, and 32 percent higher from the previous month, reflecting an improvement month by month.

Fibre2fashion News Desk - India