Sinolink: Continuous optimization of the supply structure of viscose staple fiber, with the industry expected to recover under the background of "low inventory + high production capacity".

date
11/08/2025
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GMT Eight
In the medium to long term, the continuous increase in non-woven fabric production and the expected increase in the penetration rate of viscose short fibers are likely to drive the continuous growth of viscose short fiber demand.
Sinolink's research report states that from the supply side perspective, the concentration of the viscose staple fiber industry continues to increase, and there is limited new capacity in the short to medium term, with the advantages of leading companies becoming more prominent; from the demand side perspective, in the short term, the viscose staple fiber industry is in a "low inventory + high operating rate" state, while downstream demand is expected to enter the peak season. In the medium to long term, the continuous increase in non-woven fabric production and the increase in penetration rate of viscose staple fiber are expected to drive continuous growth in demand for viscose staple fiber. Considering that the industry's overall profitability has already experienced a long bottom cycle, there is a possibility of viscose staple fiber achieving a certain degree of price increase in stages, and it is recommended to pay attention to related targets with viscose staple fiber production capacity layout. Sinolink's main points are as follows: Supply side: "Limited new capacity + elimination of backward capacity", industry concentration continues to increase The large-scale expansion period of domestic viscose staple fiber production capacity has passed, with a gradual decrease in capacity over the past three years. According to Sublime China Information data, domestic viscose staple fiber production capacity peaked in 2020-2021, increasing from 3.45 million tons to 5.3 million tons. Since 2022, domestic viscose staple fiber production capacity has been decreasing year by year, with domestic viscose staple fiber production capacity expected to be approximately 4.815 million tons by 2024, a decrease of about 485,000 tons, or 9%, compared to the peak of 2020-2021. Strict energy consumption indicators and policy restrictions have led to the gradual elimination of some production capacity. Because the production process of viscose staple fiber requires a significant amount of water and electricity and produces pollutants such as CS2, policies related to capacity, energy consumption standards, and pollutant treatment have been issued since 2017. Starting from 2017, some domestic viscose staple fiber production capacity has gradually exited, with a total of 555,000 tons exiting since 2017 according to data from Baichuan Yingfu. The industry structure continues to optimize, with the scale advantages of leading companies becoming more prominent. According to Sublime China Information data, the CR3 of the viscose staple fiber industry was only 27% in 2014, but has risen to a higher level of 72% in 2024. According to Sublime China Information and relevant company announcement data, the total production capacity of domestic viscose staple fiber is 4.815 million tons, with the top three companies in terms of capacity being Sateri (1.8 million tons, 37%), Xinjiang Zhongtai Chemical (880,000 tons, 18%), and Tangshan Sanyou Chemical Industries (800,000 tons, 17%). Demand side: Steady growth in apparent consumption, potential increase in prosperity under the conditions of "high operating rate + low inventory" According to Sublime China Information data, from 2014 to 2024, domestic viscose staple fiber's apparent consumption increased from 2.93 million tons to 4.23 million tons, with an average annual compound growth rate of about 4%. In 2024, cotton yarn accounted for 55% of downstream demand for viscose staple fiber, while T/RC/RN/R accounted for 26%, and non-woven fabric accounted for 18%, with the proportion of non-woven fabric increasing by 15% compared to 2015. From the perspective of inventory and operating rate, as of the end of July, the inventory days of domestic viscose staple fiber were about 7.5 days, at a historically relatively low level. Since mid-July, the operating rate of the domestic viscose staple fiber industry has been maintained at a high level of 85%. With the combination of "low inventory + high operating rate" and downstream entering the traditional peak season, viscose staple fiber prices are expected to rise. According to the July monthly report of the China Cotton Market released by the China Cotton Information Center, as of July 24, the sales rate of domestic cotton for the 2024/25 season was 96.5%, an increase of 7.6 percentage points year-on-year, and an increase of 8.2 percentage points compared to the four-year average. By the end of June, the national commercial cotton inventory was at its lowest level in nearly seven years, and the cotton-viscose staple fiber price spread was gradually widening. Coupled with downstream demand entering the traditional peak season, this may provide room for price increases in viscose staple fiber. Risk factors Demand from downstream industries is lower than expected; fluctuations in cotton prices; fluctuations in raw material prices; international trade frictions; unexpected progress in new capacity production; differences in statistical methods may exist.