China's viscose staple fiber (VSF) companies reached an agreement on Wednesday to form a price alliance in a bid to keep VSP prices stable. Tight market supply resulted in the consumption of almost all inventories and some companies raised VSP prices up by 100-200 yuan/tonne in October and VSP prices rose about 30 percent year on year so far this year, the Shanghai Securities News reported on Thursday.
The higher-than-expected growth of VSF prices was induced by the improvement of supply and demand. The output capacity of VSP industry in China is currently over 3 million tonnes, slow increase in new capacity and strict environmental protection requests have eliminated nearly 10 percent outdated capacity and improved the structure of supply and demand. China's VSF price grew steadily in Wednesday, the inventories were still tight, and some companies lifted their quotations.
The quotations for mid-VSF were 14,600-14,700 yuan/tonne and the hammer prices were around 14,400-14,500 yuan/tonne; those for high-end VSF were 14,700-14,800 yuan/tonne and the hammer prices were above 14,700 yuan/tonne. The market believes that the VSF prices are firm, some companies still intend to raise their quotations, and the prices may climb further next week.
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