Market Forecast: Viscose Staple Production Will Exceed Cotton In The Next 3 Years

In the short span of 15 years, the production of viscose staple fiber from less than 500 thousand tons to 3 million 770 thousand tons in 2016 is the largest growth rate in the production of chemical fiber products.

It is estimated that the supply and demand of viscose staple fiber will remain the same pattern in 2016 in 2017.

It is bold to predict that viscose staple fiber will exceed cotton production in the next 3 years.

This paper reviews the production and marketing trend of viscose staple fiber in China in 2016, and based on 2013-2016 years' industry fundamentals and factual data, combined with global macroeconomic policies and major impact events, it forecasts the market of viscose staple fiber in 2017.

In 2016, the total production capacity of viscose staple fiber production plant in China was 3 million 770 thousand tons, and its output was estimated at 3 million 360 thousand tons, an increase of 410 thousand tons compared with 2015.

In 2016, the total import volume of viscose staple fiber in China was estimated at 125 thousand tons, which shrank slightly compared with 2015.

The cumulative export volume of viscose staple fibres in China is estimated at 323 thousand tons in 2016, which is more obvious than that in 2015.

In the past 2005-2015 years, the annual average apparent demand growth of viscose staple fiber was 13.4%, and the annual growth rate of viscose staple fiber remained at 13% for the past five years.

Overall demand in 2013 saw a faster growth and a negative growth in 2014. Since 2015, most of the raw materials of cotton spinning enterprises changed from cotton to viscose, which made the apparent demand for viscose staple start to return to normal. In 2016, cotton prices fluctuated greatly, and the price of polyester staple fibers fluctuated with the price of crude oil for a long time, making cotton spinning enterprises stronger in using viscose staple as raw materials, and the apparent demand for viscose staple fiber continued to improve.

The new capacity of 50 thousand tons in 2016 came from new agriculture development in alar, Xinjiang, and the total capacity of the industry increased to 3 million 770 thousand tons / year.

Since 2010, China's viscose staple fiber enterprises have shown as follows:

1) regional centralization.

The demand of the government and people for environmental protection is getting higher and higher. Especially after the 11-12 month's large-scale fog and haze in 2016, more and more industries such as chemical fiber, printing and dyeing, paper making, cement and other related industries must enter the park to facilitate the "three wastes disposal".

From the current geographical distribution of viscose staple fiber industry, Xinjiang, Jiangsu, Jiangxi, Hebei, Shandong, Sichuan, Fujian and other provinces are the main production bases of viscose staple fiber industry.

2) the scale of enterprises has been continuously improved. Compared with the previous 2010, the production capacity of viscose staple fiber industry has basically reached the scale of 100 thousand tons per enterprise, and only 4 factories now have a scale of less than 100 thousand tons.

3) the environmental protection of enterprises is increasing. According to the requirements of the Ministry of industry and commerce, the annual investment in environmental protection by viscose staple fiber industry is increasing year by year, and the new projects directly incorporate the supporting environmental protection facilities into the production infrastructure.

4) most factories in the industry have increased the development of new viscose staple fiber, such as Tangshan three friends, though the annual production capacity reaches 500 thousand tons, but its conventional varieties produce only 350 thousand -40 tons per year, and the remaining ones are bamboo Dyer, modal, colored viscose staple fiber, high viscose staple fiber and other differentiated viscose staple fiber.

The production capacity of differential fiber has been continuously improved. It has objectively avoided the adverse effect of the sharp fluctuation of market price caused by the insufficient market capacity after the expansion of the industry scale.

The average starting load in 2016 exceeded 90% to 90.22%, which is nearly 5 percentage points higher than that in 2015.

In 2016, the industry maintained a 90% high load operation for most of the time. The three quarter surge in supply and the industry load was as high as 95%.

Only during the Spring Festival and the G20 summit in Hangzhou, the industry load dropped to 85% near the lowest level in the year.

The overall sales situation of viscose staple in 2016 was better than that of last year. In July and December, the industry was concentrated and oversold. In the 2016 months, the average sales volume was 283 thousand tons, compared with the 247 thousand tons in 2015.

The main factors that increase sales in 2016 are:

1) cotton prices fluctuated for 2015-2016 years, while good cotton supply was insufficient in the market, which made some spinning and weaving enterprises spin viscose staple fibers.

2) the "imitation rabbit hair" core spun yarn is in short supply in 2016. The main raw materials of "imitation rabbit hair" core spun yarn are: 70% viscose staple fiber, 30% nylon short fiber and PBT three kinds of raw materials, because this variety, not only viscose staple fiber in 2016, in short supply, also led to the nylon short fiber in the whole 2016 showed a shortage of supply.

The total market volume in 2016 is about 1 million 300 thousand tons.

3) although viscose staple production increased in 2016 compared with 2015, but due to the increase in downstream demand, and in 2016 the whole viscose staple fiber industry due to weather, environmental protection and other factors, the number of parking times more than 2015. In a specific period of time, the downstream market is worried that the raw materials can not get the psychological drive, the industry has focused on the time to purchase raw materials.

Viscose staple fiber in 2016 to achieve a big counterattack, low price consolidation in the first quarter.

Since March, Xinjiang's environmental protection inspection has affected the supply of the market, and the price has started to rise. After that, the prices of Xinjiang and Putian were further reduced.

CCFEI sticky short 1.5D price index lowest 11280 yuan / ton in the year, the highest rise to 17000 yuan / ton, the total rose 5720 yuan / ton, up 50.7%.

11-12 month high diving, a total decline of 2100 yuan / ton, to 14900 yuan / ton, down 12.35%.

As of the end of 12, prices rose steadily to 16700 yuan / ton.

Quotations for the year are as follows:

At the beginning of January, viscose staple bottoms rebounded. In early days, viscose manufacturers introduced the maintenance plan during the Spring Festival. From the second week, the high-end mainstream factories introduced 1000 tons of orders, 12000 yuan / ton preferential policies, and the middle end manufacturers were shipped at a low price of 11800-12000 yuan / ton.

Downstream to enter the centralized warehouse period, viscose factory orders surge, high-end, middle end representative manufacturers cumulative weekly sign up to tens of thousands of tons, manufacturers in the industry generally empty the existing inventory.

Third weeks manufacturers sell at a low price, the price is restored, and the middle end is sold.

To 12300-12400 yuan / ton, high-end to 12400-12500 yuan / ton.

In the middle and late Spring Festival holidays approaching, the market paction weakened, manufacturers quotes still slightly pulled up, to the end of the month, the high-end offer to 12600-12700 yuan / ton, high-end to 12500-12700 yuan / ton.

Manufacturers during the Spring Festival maintenance plan to boost market confidence.

The price of the market has gone up, and the manufacturers' quotations have been rising after the Spring Festival holiday. The resumption of work after the downstream Festival is better than expected. After the first week of the holiday, there is more concentrated demand, and production and sales are generally hot.

Later, because of the impact of cotton futures, the enthusiasm of the downstream stocks was slightly suppressed, and the atmosphere of the new single trading market tended to be rational.

Manufacturers rely on previous orders industry inventory remains low level, some manufacturers are more nervous delivery, to maintain the reluctant sale operation.

After the price touched 14000 yuan / ton, the new market paction has weakened, and the downstream chase mentality has tended to be cautious. However, the manufacturer still maintains a lower inventory with its large initial orders.

On the last working day of March, due to ample orders in the early stage, the quoted price of the mainstream manufacturers increased by 100 yuan, and the middle end price was quoted at 13800-14200 yuan / ton, and the high-end was reported to 14200 yuan / ton.

Viscose staple fiber entered a weak finishing in April. In the first half of the month, the manufacturer changed its price by changing the price of the previous super signed order. The middle end discussed at 13600-13800 yuan / ton, and the high-end was 13900-14000 yuan / ton.

In the first ten days, the price began to fall down, and the resistance at the previous high level increased. After a long period of low production and sales, the stock of the industry increased slightly, and the market prices loosened more frequently after mid - to the end of the month to 13000-13300 yuan / ton, less than 13000 yuan / ton, the high-end mainstream 13600-13700 yuan / ton, and the low 13500 yuan / ton.

At the end of April and early May, the Jiujiang viscose staple device was completely shut down and the market supply was reduced.

And coincides with the downstream centralized stocking period.

At the beginning of the month, there was more volume in the market. After that, the price was gradually raised. At the beginning of the month, the middle end was 13000-13200 yuan / ton, and the lower negotiability fell below 13000 yuan / ton, and the high-end was 13500-13700 yuan / ton.

At the end of the month, the quotation is 13500-14000 yuan / ton, the firm price is 13400-13500 yuan / ton, and the high-end execution is 13900 yuan / ton.

Downstream yarn, cloth market performance is light, purchasing viscose staple fiber enthusiasm has gradually cooled.

The viscose factory maintained a low production and marketing for a long time. In the early part of 6, some of the earlier quotations came back to the mainstream.

The price of 13700 yuan / ton or more of the mid end market in May basically disappeared. The mainstream market negotiated that the turnover was 13400-13600 yuan / ton, and some lower pactions began to loose to 13100-13200 yuan / ton.

The high end market is stable because of pre orders and export orders, and the price performance is down. The executive negotiation remains at 13800-13900 yuan / ton.

In July, the market reversed sharply, and cotton futures rose strongly in early June. The Funing Australian ocean was affected by tornado parking. It coincided with the centralized stocking and traders' operation in the lower reaches of the market, making the market price strong and the manufacturers sign more.

In August, the production of Xinjiang Shun Quan and Xinjiang Australia was unstable, and the delivery was very intense. After that, the G20 summit in Hangzhou led to the parking of mainstream manufacturers in Zhejiang.

Until the end of October, the high-end mainstream offer to 17000-17400 yuan / ton, the middle end quote to 16700-17000 yuan / ton.

In mid October, the market prices of viscose staple fiber were plunged, prices fell sharply, and some of the viscose factories were shipped below market prices, and market confidence was also under pressure.

After a long week of stalemate, the price of viscose factory began to officially enter the downstream channel, the market price is chaotic, the low price news spreads, and the panic is fermented continuously.

During the period, Zhou Jie and the monthly knot policy of some manufacturers came out one after another.

By mid November, the price is 14800-15000 yuan / ton.

11 in the middle of last month, the mainstream manufacturers in the middle of the month reached a volume of 15000 yuan / ton. After accumulating tens of thousands of tons, the market confidence was restored, and the rest of the manufacturers in the middle of the month concluded the policy of monthly closing, and signed the invoice in the vicinity of 14800-15000 yuan / ton.

Subsequently, the price was cancelled, and the quoted price was 100 yuan / ton.

Enter the high-end manufacturers in December 15000 yuan / ton again large single deal, the middle end manufacturers in 14700-15300 yuan / ton also signed a large number.

Then the constant day sea dragon device parking, the three friends production line Limited maintenance, Funing Australian production line repair and other intensifies the market strong rise, until the end of 12, the trend is still swift and violent, the middle end of the mainstream quotation of 16600-17000 yuan / ton, high-end newspaper in 16700-16900 yuan / ton.

In just 15 years,

Production capacity from less than 500 thousand tons to 3 million 770 thousand tons in 2016 is the largest growth rate in the production of chemical fiber products.

In 2017, the new 160 thousand tons project in Jiujiang will be put into operation. The Yami 60 thousand ton technical pformation project in Shandong will also be put on the market and the industry capacity growth will keep 5.8% low.

In 2018 -2019, the industry will reenter the high capacity growth rate. In the future, more than 1 million tons of new capacity will be released. Boldly predict that in the next 3 years, the production of viscose staple fiber will surpass cotton.

At the same time, when Trump came to power, he abandoned the "TPP agreement" in the Obama era and the expected depreciation of the RMB in the "7". At the same time, the Chinese government will continue to strengthen the strategic layout of "one belt and one road" in 2017. Xinjiang's Viscose staple fiber and cotton yarn will be put into use by the host country under the strategy of this country, such as Pakistan, Turkey and other countries.

Therefore, China's export situation may be better than that of 2016 in 2017.

And other textile varieties with high export dependence may show a state of rising volume and price.

From the perspective of domestic demand, the production of differentiated viscose staple fibers provides more options for downstream yarn and mid end users in selecting raw materials.

At the same time, since the implementation of the "two child open policy" in 2015, with the implementation of this policy or the baby boom in 2017, the "baby boom" and "aging population" demand for diapers, wet wipes and other non-woven products such as masks and so on have also opened the door for mass production of high viscose staple fiber.

Overall, China's viscose staple fiber production capacity is further increasing, but the market demand is faster than viscose staple fiber production capacity. Therefore, it is estimated that the price of viscose staple fiber in 2017 is lower than the average market price of 14450 yuan / ton in 2016, and the market price of viscose staple fiber in 2017-2019 years is expected to create a new high in the past five years.

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