A bullish trend was observed in the Asian Viscose Filament Yarn (VFY) market in November 2024, mostly due to changing demand dynamics, geopolitical considerations, and seasonal impacts.
Due to the United States’ announcement of new tariffs, VFY prices in China saw very little change during this time. Growing tariffs, accusations of forced labour, and heightened geopolitical tensions have raised concerns about the US design industry’s reliance on Chinese sources for clothing. Further affecting the VFY market in the area was the political unrest that followed the overthrow of the Sheikh Hasina administration in Bangladesh, which also caused supply chain disruptions in the textile industry. These conditions made it possible for nearby nations, particularly India, to improve their standing in the global VFY market.
During November 2024, the Indian VFY market performed well. In India, VFY prices increased by 3.66 per cent in November to Rs. 420,400/MT Ex-Surat. The main drivers of this growing trend were robust demand, government policies, and a rise in exports abroad. India’s proportion of clothing exports to the US and the UK increased to 7 per cent and 6 per cent, respectively, in 2024 from 6 per cent and 5 per cent in 2023, according to reports.
In an effort to increase exports and local production, the Indian government has been aggressively supporting the textile and clothing industry through programs like the Production Linked Incentive (PLI) scheme. Giriraj Singh, the Union Minister, emphasised the Textile Department’s goal of increasing the size of the Indian textile market from US $ 176 billion to US $ 300 billion.
The VFY market in China faced difficulties due to low production costs, growing logistical costs, and geopolitical unpredictability. Feedstock trends played a major role in these problems, with hardwood pulp prices steadily reducing throughout November and softwood pulp prices climbing temporarily before plummeting. Pressure on manufacturing costs for Chinese VFY makers was further increased by the strong fluctuations in caustic soda prices, which fell 5.7 per cent in the second half of the month. Notwithstanding these difficulties, the October report showed a modest increase in total textile exports, indicating some market resilience.
