Rayon Staple Rebounded Slightly. What'S The Following Trend?

This week, as commodity prices rose, the price of raw materials increased, and the production and sales rate of downstream yarns and fabrics increased. So overall, the market price of viscose staple fiber has slightly rebounded this week, so what will follow?

Dissolved pulp appears to slide.

In 5-6 months of 2019, the import dissolving pulp market showed a rapid decline.

In the coming period, the market price of dissolving pulp still has the possibility of continuing to fall. This decline in price is mainly due to the decrease in the operating rate of viscose staple fiber. But on the other hand, it is not difficult to see that the countries without anti-dumping duties are the main producing areas of the world dissolving pulp. Apart from the escalation of Sino US trade war in the US, the import tariff of the US and China has increased by 5%.

The amount of imported dissolving pulp will remain dominant in the market for a period of time, and the market price of domestic dissolving pulp will be closer to it.

Parking in profit and loss

By the end of 2018, there were 16 enterprises in China, with an overall capacity of about 4 million 850 thousand tons. In 2018 alone, the total production capacity was 700 thousand tons, and the capacity utilization rate was only 75%. In 2019, the rapid decline in prices made the viscose staple fiber industry increase in losses, and the overall capacity utilization rate of the industry also declined significantly. Up to June, the viscose staple fiber had a gross profit of nearly 2000 yuan.

Therefore, in order to avoid losses, a part of viscose staple fiber enterprises chose to stop the car, such as Sai Deli and Xinjiang FILDA recently stopped and overhauled, involving a capacity of up to 60 tons, and the operating rate quickly dropped to 63.4% historical lows.

Weak downstream demand

The overall downstream consumption is weak, from yarn to gray cloth to home textiles and other end products. The whole industrial chain is in a state of being in stock. Shandong and Jiangsu and Zhejiang enterprises have said that some small and medium-sized cotton mills have generally stored cotton yarn for more than 1 months, up to three months. Although the Sino US trade market is optimistic, the current situation is grim. In order to solve the current situation, some enterprises have to limit production, so as to reduce inventory. Due to difficulties in capital flow, some small factories choose to stop production and maintenance.

To sum up, at present, the starting rate of viscose staple fiber industry has dropped to below 7, and the impact of Sino US trade war on China's viscose staple fiber's foreign trade pattern is complicated and complicated, coupled with the continued downturn in demand. Viscose market is expected to maintain the status quo, prices will not fluctuate in the short term. (source: textile science research, Keqiao textile index)