Viscose staple fiber: The turning point of prosperity is coming, and the industry is expected to usher in a rise in volume and price

The price difference between viscose staple fiber and cotton continues to widen, and the substitution effect accelerates the recovery of the industry

Viscose staple fiber and cotton substitute each other. Viscose staple fiber and cotton performance is relatively close, both belong to fibrin fiber, have good moisture absorption, good air permeability, easy to dye, skin comfort, easy to degrade and other characteristics, upstream are from natural fibers, downstream application field overlap rate is high. The general cotton spinning equipment can spin viscose fiber after small process adjustment, which is the most similar fiber of cotton spinning process. Therefore, the two are strong substitutes for each other. With economic development and consumption upgrading, the market's pursuit of functional, differentiated, fashionable products is becoming more and more enthusiastic, viscose staple fiber can meet the above needs through physical and chemical modification, and actively replace part of the cotton application market. Affected by the cost of leasing land and labor cost, the cost of cotton is often higher than that of viscose staple fiber, which has a strong price competitive advantage.

Cotton prices are expected to rise, the substitution effect to help the viscose industry pick up. From 2016 to 2019, China's cotton production as a whole is relatively stable, apparent consumption shows a slow growth trend, cotton imports are increasing year by year, and there is a gap between cotton supply and demand in China. In 2020, China's cotton production is about 5.8 million tons, and the demand is expected to be about 7.9 million tons in 2021, and the gap between domestic cotton supply and demand will be further expanded. Coupled with the end of 2020 cotton flower inventory of about 3.1 million tons, close to the historical bottom level, cotton prices still have room to rise significantly, we believe that the replacement effect of low-price products will be a positive factor driving the viscose staple fiber industry to pick up.

The industry boom is rising, and the viscose-cotton price difference is first wide and then narrow. Since the beginning of April 2020, with the gradual control of the domestic epidemic, the downstream demand for textile clothing has gradually recovered, and cotton prices have taken the lead in picking up, but the price of viscose staple fiber is still at a low level, and the price difference with cotton has continued to widen. After entering 2021, the price of viscose staple fiber is still rising rapidly due to the popularity of downstream orders, and the price of cotton is not as fast as that of viscose staple fiber, and the price difference between viscose and cotton is rapidly reduced from 3963 yuan/ton at the end of 2020 to 636 yuan/ton on March 5, 2021. From the historical data, cotton and viscose staple fiber show the same price trend, and the price fluctuation of viscose staple fiber is more severe, the boom degree upward cycle from the second half of 2016 to the first half of 2017, viscose staple fiber once exceeded the price of cotton to 17,200 yuan/ton. After entering 2021, the chemical fiber boom went up again, and with the price rise and the price difference narrowed, viscose staple fiber exceeded the cotton price again from March 26 to 28, reaching 15,300 yuan/ton, and as of April 2, 2021, the cotton-viscose price difference was only 48 yuan/ton.

3, capacity expansion is coming to an end, supply ushered in marginal improvement

Capacity expansion is nearing an end, and the industry's self-sufficiency rate is sufficient

New production capacity is limited, and industry expansion is slowing down. From 2015 to 2017, the viscose staple fiber industry was in an upward cycle, and viscose staple fiber enterprises expanded their production. In 2018, a total of 1 million tons of domestic production capacity was completed and put into operation, with a year-on-year increase of 17.23%. Subsequently, the market began to enter the phase of digesting new production capacity, the industry boom was down, and the new production capacity was limited. In 2020, the nominal capacity of the viscose staple fiber industry is 5 million tons, an increase of 2% year-on-year, and the new capacity is only 290,000 tons, which are 250,000 tons of Sateri and 40,000 tons of clean and high white viscose staple fiber production capacity of Xinjiang Zhongtai Textile Group Korla Fiber Company, a subsidiary of Zhongtai Chemical. Affected by the epidemic, the operating rate of viscose staple fiber once dropped to 60% in mid-2020, the annual output fell 5% year-on-year, and the capacity utilization rate was 73.5%. Excluding Hengtian Hailong, Chengdu Liya and other production capacity, the effective production capacity of the industry is 4.51 million tons, compared with 2019, the effective production capacity of the industry in 2020 has decreased slightly by about 60,000 tons, and the stage of substantial expansion of the industry is nearing the end.

The import and export dependence of viscose staple fiber is small, and the self-sufficiency rate is sufficient. In 2019, China's viscose imports were 226,900 tons, and in 2020, affected by the epidemic situation at home and abroad, China's viscose staple fiber imports were about 163,000 tons, down 28% year-on-year. In 2020, the import volume of viscose staple fiber accounted for about 4.9% of the apparent consumption, the export volume accounted for about 8% of the total production capacity, the import and export dependence is low, and the self-production and self-marketing rate is sufficient. At present, the main source countries of viscose staple fiber imports include Austria, the United Kingdom, India, Thailand, Japan and other places.