No Sustainable Recovery in the Viscose Staple Fiber Demand as COVID Cases Rise in China

China: As COVID cases surge in the Chinese market, the demand for Viscose Staple Fiber (VSF) has been reducing, discouraging retail sales. However, textile sales are expected to remain sluggish in the near term as COVID spreads rapidly, restricting outdoor shopping. Increased confirmed cases over the past few weeks have significantly lowered labor productivity and disrupted the supply chain for the industry.

In addition, the sales of apparel, home textiles, dress materials, knitwear, and non-woven materials would also be impacted due to logistics disruption and increasing infection among workers. There are rarely any large orders in the VSF market from other nations as well. Most purchasers and end users were reluctant to build up stockpiles at the end of the year. Some small manufacturers were even compelled to close earlier than anticipated for the Chinese Lunar New Year holiday in late January due to the fast-expanding COVID cases in China.

Meanwhile, the VSF industry and trade are facing poor demand from the global market due to the economic slowdown and high inflation. Higher prices of cotton and other fibers are also pushing the cost of production up, thus squeezing manufacturers' profit margins. The risk of the new COVID wave is another challenge for the VSF manufacturers, which are already dealing with unfavorable market conditions.

Looking through China's surge in COVID cases, Indian VSF industries are also cautious. The risk of the pandemic and the interruption is currently being evaluated by industry and trade specialists. Some dealers claimed that VSF manufacturers had already cut back on their purchases since there is a general sense of uncertainty glooming around both buyers and sellers since they are clueless about the consequences of the COVID-resurge.

However, ChemAnalyst suggests, "The Sales of VSF material are expected to remain uncertain due to the rising COVID cases, which may disrupt the production units. If the rise in cases continues, the VSF supply may be disrupted, thus reducing the sales offshores. Also, market sentiments might be ruined amidst a decline in offtakes from consumers."