the price difference between cotton and VSF has been narrowing

Since cotton has dropped above 20,000yuan/mt last year, the price difference between cotton and VSF has been narrowing. With the recent rise in cotton prices, the spread has reached a relatively high level in the past year. Moreover, the fundamentals of VSF are still tolerable at present, and the physical inventory of VSF plants is at a low level. The main resistance to limit the rise of VSF comes from the lack of hot spots in the downstream sector. If cotton price rises sharply, the confidence of the entire textile industry will be improved, and the weakness of rayon yarn will be changed, then VSF may achieve a breakthrough. Opportunities also exist for lyocell. At present, cotton/lyocell production is increasing. Whether it is cost, product concept or attributes, cotton/lyocell products have characteristics recognized by the market compared with 100% cotton products. If cotton prices continue to rise, the demand for lyocell is also expected to increase. Of course, the premise is that the price of cotton continues to rise. For products that are traded in futures market, it is difficult and unrealistic to draw a definite conclusion. But yesterday's sharp rise did change the previous dull atmosphere, whether it will rise further is noteworthy.