Tight supply, growing demand, viscose staple fiber prices continue to rise

On March 16, the market price of viscose staple fiber continued to rise, ranging from 50 yuan to 100 yuan per ton, with a cumulative increase of nearly 10% since the holiday. Manufacturers generally implement early contracts, and those with large orders have been scheduled until April. At present, the maintenance capacity of viscose manufacturers is about 20%, and the market inventory pressure is light. Essence Securities believes that the tight supply and demand situation in the sticky short-term industry is expected to continue in 2016 without new production capacity and continued growth in demand.
According to news on March 18, the latest developments show that the recent maintenance capacity of viscose manufacturers is about 20%, mainly concentrated in Shandong, Fujian and some manufacturers in central China, and the market inventory is low. In terms of mainstream quotations, the mid-range quotation ranges from 13,700 yuan to 13,800 yuan/ton, and the focus of firm transactions is between 13,500 yuan and 13,600 yuan/ton. The high-end quotation is 13,900 yuan/ton. Manufacturers generally implement early contracts, and those with large orders are postponed to April levels.
From the perspective of the supply and demand pattern of the industry, due to the market downturn and environmental protection pressure, the production capacity of the viscose staple fiber industry has slowed down significantly in recent years. The growth rate of new production capacity in 2014 and 2015 was only 6%, which was significantly lower than in the past few years. annual average. At the same time, under the pressure of environmental protection, about 10% of production capacity exited the market in 2015, causing a significant contraction of the supply side. As of the end of 2015, my country’s viscose staple fiber production capacity totaled approximately 3.71 million tons, while the apparent demand in 2015 was 3.1 million tons, export volume was 220,000 tons, and import volume was 140,000 tons. The average operating rate of the industry throughout the year exceeded 85%, and the industry Supply and demand are basically balanced.
Considering that Zhejiang Xiaoshan Fulida’s 180,000-ton unit is scheduled to be relocated in the first half of 2016, and the new production capacity is only 90,000 tons (Xinjiang Fulida’s capacity expansion is 40,000 tons and Shandong Yinying’s 50,000 tons), the actual supply capacity of the industry may appear. Negative growth. In addition, due to the withdrawal of some backward production capacities, industry concentration has gradually increased, and synergy among enterprises has significantly increased. At present, the concentration of the domestic viscose staple fiber industry is relatively high. The top five companies in terms of production capacity occupy about 53% of the industry’s market share, and the top ten companies account for about 79%.
In addition, in terms of upstream raw materials, the expansion rate of dissolving pulp in recent years has been much higher than that of the sticky pulp industry. It is expected that the supply of dissolving pulp will continue to be loose, and the bargaining power of sticky pulp companies against upstream pulp mills will be further enhanced. At the same time, downstream spinning and weaving enterprises are relatively scattered, and their bargaining power against short-cut enterprises is not strong.
Under the increasing synergy of price alliances among leading enterprises, the wave of mergers and acquisitions, and pressure from environmental protection, the viscose staple fiber industry continues to improve. In addition, since 2015, the trend of the downstream textile industry has stabilized, and the demand of the export-oriented textile and garment industry has increased, thus driving the consumption of raw material viscose staple fiber to increase.