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 supply and demand pattern has improved, and the industry concentration has increased

China is the world's largest producer of viscose staple fiber, accounting for 73% of the capacity of China's viscose staple fiber industry in 2020. Indonesia is the world's second largest producer, involving viscose staple fiber production capacity of 850,000 tons/year, India, Austria, Thailand also have 600,000 tons/year, 280,000 tons/year, 180,000 tons/year of viscose staple fiber production capacity.

Small and medium-sized production capacity withdrawal, industry concentration increased. At present, domestic viscose staple fiber leaders are mainly foreign-funded or state-owned enterprises, Tangshan Sanyou Group, Xinjiang Zhongtai Group, Shandong Bohai Industry, Singapore Golden Eagle Group, India Aditya Bella Group, Hengtian Group, etc., are located in the world's top ten, the industrial support is more complete, and can expand against the trend of industry losses. In 2020, due to the impact of the new coronavirus epidemic, industry production and sales were blocked, the price of staple fiber was low, many small and medium-sized enterprises suffered substantial losses, and cash flow continued to be negative. In order to stop losses in time, Xiaoshan Fulida withdrew 180,000 tons of production capacity, Jiujiang Hundhang, Dandong Chemical and other enterprises also stopped production and withdrew. With the advantages of capital and scale, the industry leader expanded against the trend, Satelli acquired Jiangxi Longda and Jiangsu Xiangsheng, Silya acquired Manas Aoyang, Sanyou Chemical and Zhongtai Chemical continued to expand production, the industry gap widened, and the industry concentration was further improved. In 2020, the share of CR3 will rise to 58% and CR6 to 79%.

The supply and demand pattern has improved, and the industry is expected to usher in a rise in volume and price. In 2021, Xinxiang Chemical Fiber is expected to withdraw 100,000 tons of production capacity, and Xinjiang Shunquan is expected to withdraw 60,000 tons of production capacity. Leading company Sateri is expected to add a total of 155,000 tons of capacity through acquisitions, Sanyou Group is expected to add 50,000 tons of capacity, and Xinjiang Tiantai is expected to add 30,000 tons of capacity. In 2021, the total new net production capacity is only 75,000 tons, and the industry concentration will be further improved. In late July 2020, viscose staple fiber reached the lowest price in history of 8300 yuan/ton, factories have made profit promotion, led to a large number of purchases in the market, the industry inventory continues to be at a low level, and the subsequent recovery of downstream spinning demand is predicted to be overall low viscose staple fiber inventory. With the withdrawal of small and medium-sized production capacity, viscose prices are expected to bottom out and rebound. With the release of some new production capacity in the country, the effective production capacity of viscose staple fiber in China will reach 4.85 million tons in the future, and the recovery of demand in the downstream textile and clothing industry will drive the steady increase of production and apparent consumption, which is expected to usher in a rising volume and price market.