Cotton Prices Are Higher Than Viscose Staple Prices.

Cotton futures main contract 1701 rose sharply in the past two weeks, or about 20%. Viscose staple fiber has a certain substitution relationship with cotton. Historically, cotton prices have a higher correlation with viscose staple fiber prices, and cotton prices are expected to drive up viscose prices.

The 2016 G20 summit in Hangzhou will be held on September 4th -5.

Held, the surrounding enterprises will therefore stop production.

Located in Xiaoshan District of Hangzhou City, Zhejiang, the company has 180 thousand tons of viscose staple fiber, which accounts for about 5% of the capacity of the industry. It is expected to stop production and maintenance during the G20 summit. In 8, 9 and October, it is in the traditional peak season of textile industry, and has a strong demand for upstream textile materials, and the three quarter.

Overlay of some enterprises during peak season is expected to bring viscose staple fiber prices higher than expected.

Beginning in 2014

The industry basically has no new capacity to go into operation, and the industry starts to hit bottom and pick up gradually.

According to statistics, the production of viscose staple fiber in 2015 was 3 million 180 thousand tons and the apparent consumption was 3 million 100 thousand. According to the 3 million 700 thousand tons capacity of the industry, the average operating rate in 2015 was 86%.

At present, the textile industry in the downstream is off season, but the price of viscose staple fiber is still relatively high. The price of the middle end market is about 13500 yuan / ton, which is significantly higher than that of the 14 years and 15 years, indicating that the supply and demand pattern of viscose staple fiber industry has improved significantly.

From the expansion plan announced by companies in the industry, the growth rate of new capacity in the next two years will be 7% and 5% respectively, and the new production will be put in order. The annual demand for viscose staple fiber will increase by about 7%-8%, and the new capacity can be successfully digested. Therefore, we expect that the viscose staple fiber industry will continue to boom in the next two years.

Judging from the price trend of cotton and viscose staple, the two are highly correlated and tend to fall with the same trend.

Cotton futures prices began to rise in April 11, 2016 from 10190 yuan / ton. At present, cotton futures prices have reached 15425 yuan / ton, the cumulative increase of more than 50%, and cotton futures prices have significantly exceeded the price of viscose staple fiber. Cotton prices are expected to drive up viscose staple prices.