In 2022, the viscose staple fiber industry has undergone many essential changes, including changes in raw material supply, viscose staple fiber itself, and the downstream rayon yarn sector. Output fluctuations are not the key factor affecting the price trend of viscose staple fiber in 2022. The output and price fluctuations of commodities in the downstream market will have a greater impact on the price trend of viscose staple fiber.
The viscose staple fiber market may move forward in the mud in 2023. However, compared with the stagnation and regression in 2022, there will be fundamental changes. The main theme of industry development will be market prices, industry upstream and downstream market ecology, and downstream product structure. Fixed a series of issues.
Annual output in 2022 will decrease by 10.13% year-on-year
From the perspective of raw materials, cotton pulp is produced in only a few factories in Xinjiang, and the output of cotton pulp in 2022 will only be about 30,000 tons. Bamboo dissolving pulp is mainly produced in Fujian Qingshan Paper Industry, with a total output of no more than 10,000 tons. Although domestic dissolving pulp has a production capacity of 2.6 million tons, its output is only about 300,000 tons.
In 2022, my country’s viscose staple fiber production capacity will be 5.23 million tons, with output around 3.55 million tons, a year-on-year decrease of 10.13%; approximately 3.62 million tons of dissolving pulp will be consumed. According to the above data, it can be seen that in 2022, 3.32 million tons of dissolving pulp for viscose staple fiber in my country will need to be supplemented by imported dissolving pulp.
According to customs statistics: my country will export a total of 313,900 tons of viscose staple fiber in 2022, a year-on-year decrease of 1.48%; my country will import a total of 93,300 tons of viscose staple fiber in 2022, a year-on-year decrease of 24.15% (see Table 1).
It can be seen from the data that my country’s viscose staple fiber export volume in 2022 is basically the same as in 2021; the import data has dropped significantly, mainly due to:
1) The output of overseas viscose staple fiber production bases decreased. From a global perspective, currently, viscose staple fiber production is mainly concentrated in South Asia and Europe. In Europe, the rise in wood chip and energy prices caused by the Russia-Ukraine conflict has led to a rapid increase in the production cost of viscose staple fiber in Europe, eventually forcing European viscose staple fiber factories to limit production or suspend production.
2) In 2022, due to high international cotton prices and relatively large demand for viscose staple fiber in South Asia, India has reduced its exports to my country.
3) Since the price of domestic cotton is lower than that of international cotton and is more cost-effective than viscose staple fiber, the demand for viscose staple fiber in the domestic market is not too large. From the apparent data, my country’s demand for viscose staple fiber in 2022 The overall demand for short fiber fell by 11.32% year-on-year.
4) The price of imported viscose staple fiber is higher than that of domestically produced viscose staple fiber. Imported viscose staple fiber is not very competitive in terms of price.
The above four points are the main reasons for the large decline in my country’s viscose staple fiber import data in 2022.
In terms of geographical distribution, Jiangsu and Xinjiang each have 4 viscose staple fiber factories; Shandong and Jiangxi each have 3 viscose staple fiber factories; Hebei and Sichuan each have 2 viscose staple fiber factories; Fujian, Jilin, and Hubei , Anhui each have one viscose staple fiber factory.
Judging from the nature of corporate equity, among these viscose staple fiber factories: 3 foreign-funded companies have a total production capacity of 2.075 million tons, accounting for 39.68% of the total production capacity; 8 central enterprises and state-owned enterprises have a total production capacity of 2.53 million tons, accounting for 39.68% of the total production capacity 48.37% of the total; there are three private enterprises with a total production capacity of 625,000 tons, accounting for 11.95% of the total production capacity. Judging from the nature of the three types of enterprises, the number of private enterprises in the viscose staple fiber industry is decreasing.
Prices upstream and downstream of the industrial chain “change according to demand”
Dissolving pulp and viscose price trends are similar
As the main raw material of viscose staple fiber, the price trend of dissolving pulp is similar to that of viscose staple fiber, and the two are closely related in the first half of the year (see Figure 1). However, the price trend of dissolving pulp in the second half of the year is higher than that of viscose staple fiber. The price trend lags behind, so the price trend of dissolving pulp in 2022 will show a shape similar to an “isosceles trapezoid”. Its key price nodes are: 6,800 yuan/ton, 9,500 yuan/ton, and 7,500 yuan/ton.
The general trend of domestic dissolving pulp in 2022 is as follows: in January, the price of dissolving pulp was 6800~6900 yuan/ton, and then began to rise all the way. The price reached 9500 yuan/ton at the end of June, maintained until early September, and then fell directly by 600 yuan. / ton to 8,900 yuan / ton. By early November, after falling to 8,650 yuan / ton, the price was directly reduced by 650 yuan / ton to 8,000 yuan / ton. By the end of December, the price dropped to 7,500 yuan / ton.
It can be seen from Figure 1 that the price trend of dissolving pulp in the first half of 2022 is closely related to the trend of viscose staple fiber. Especially from February to May, the frequency and magnitude of price increases of dissolving pulp are greater than that of viscose staple fiber. and large, which shows that in the first half of 2022, my country’s dissolving pulp supply will be small and the market will be in short supply. Even in June, after the price of viscose staple fiber dropped obviously, the price of dissolving pulp remained unchanged, which fully illustrates the practical problem of limited supply of dissolving pulp in my country in 2022.
Three major factors determine the price trend of viscose staple fiber
The price trend of the viscose staple fiber market in 2022 is an approximately standard isosceles triangle trend, or it is called an “A” shaped trend. That is, the market price showed an increase in the first half of the year, and the price in the second half of the year increased.�Purchase costs. For example, cotton and viscose staple fiber blended yarn is C/R yarn, which has a certain market share. However, this phenomenon did not occur in the market in 2022. Instead, yarn mills switched to viscose staple fiber when cotton prices were high, and then switched back to cotton after cotton prices fell. The direct impact of this change of raw materials and epidemic control on the spinning mills is that the operating rate of the spinning mills has been sluggish throughout the year. Especially after the epidemic prevention and control was relaxed, most spinning mills chose to take an early holiday during the Spring Festival. This decision directly led to the 2022 The production time of yarn mills is 20 to 30 days shorter than in 2021. Ultimately, the consumption of cotton and viscose staple fiber decreased.
Therefore, when the price difference between the two is too large, the use of the two by the entire downstream will be reduced. Because the excessive price difference makes it difficult for the downstream market to grasp the choice of raw materials, “chasing the rise and killing the fall” to obtain greater profits. It is difficult for operators to choose the purchasing principle, and eventually there will be a passive situation of reducing purchasing volume.
2023: Carrying a heavy load in the mud
After the Spring Festival in 2023, the operating rate of viscose staple fiber has increased from 65% before the holiday to 76%, which has played a certain supporting role in the market price of dissolving pulp. After mid-February, the price of imported dissolving pulp has reached US$20/ tons of gains. With the further increase in the operating rate of viscose staple fiber factories and the continuous release of production capacity of domestic lyocell factories, it is expected that the supply of dissolving pulp will still be tightly balanced in the first half of the year, so the price of dissolving pulp still has room to rise. This provides a good foundation for the stability of viscose staple fiber market prices.
It should be noted that dissolving pulp, as the main raw material of viscose staple fiber, is the basis for price fluctuations in all links of the entire viscose staple fiber industry chain. Based on past experience, when the price of dissolving pulp is between 7,200 and 7,500 yuan/ton, the price of the entire industry chain is relatively stable. The supply of dissolving pulp at this price is at a relatively large margin, and the operating rates of domestic and international dissolving pulp production lines are guaranteed. Once the price exceeds 7,500 yuan/ton, the operating rate of dissolving pulp will increase significantly, which will easily lead to oversupply. Phenomenon; while the price of dissolving pulp is lower than 7,200 yuan/ton, due to high costs and limited profits, the output of dissolving pulp will be reduced.
From the downstream of viscose staple fiber: the production capacity and operating rate of vortex spinning factories will further increase, and their market share will also increase. Ring-spun rayon yarn will be squeezed out of the market space by vortex spinning. In the price system of viscose staple fiber and rayon yarn, the price fluctuations of viscose staple fiber and vortex spinning will be closer.
From the perspective of the viscose staple fiber industry: there will not be many new production capacity projects in the industry in 2023. Even if there are, they will appear in the fourth quarter of 2023 or the first half of 2024. In view of this, the theme word of the viscose staple fiber industry in 2023 is: repair. This includes the repair of a series of issues regarding industry operating rates, market prices, industry upstream and downstream market ecology, and downstream product structure. Judging from the industry’s operating rate, it has recovered to 75%~78% in the first quarter of 2023, and is expected to recover to around 85% in the first half of the year; by then, the market price of viscose staple fiber will inevitably rise due to the periodic increase in supply. There is a periodic decline. However, with the support of dissolving pulp prices and the gradual recovery of downstream market conditions, it is believed that the viscose staple fiber market price will still choose to rise along the path of recovery after periodic fluctuations. Overall, the viscose staple fiber market may move forward in the mud in 2023, but there will be fundamental changes compared to the stagnation and regression in 2022.