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On the physical market, raw silk graded 3A rated between 325000 yuan and 335000 yuan per ton this week. Recently raw silk quotes dropped as silk reeling mills found harder to build the higher cost into their product pricing in a short term. The higher silk prices are resulted in substitution by textile manufacturers from high prices silk to other relatively cheap fiber. However, the general tone of current silk market is strong, especially for dried cocoon.

As spring is coming, more and more industry insiders raise serious concern over the market sentiment. On Tuesday, Xu Kunyuan , chairman of China National Textile Industry Association, held a speech about current situation. The speech stated that the hiked price was harming the stable and healthy development of natural silk industry and the industry should size up the situation and keep abreast of the development of silkworm cocoon production and prices.

Cocoon and silk prices are going up doesn’t mean the market has to continue this upward trend. This week prices of back months on CCSE electronic market dropped sharply as a result of profit-taking activities of buyers.