Last week (July 8-14, 2024), downstream demand was flat, with on-demand procurement being the main focus. The raw material dissolution slurry market remained generally stable, while viscose staple fiber enterprises had tight inventory and stable operation, resulting in stable prices. The downstream cotton yarn market had weak production, and the overall market was still dominated by rigid demand procurement. There was no obvious sign of improvement on the demand side. Downstream yarn factories mainly consumed inventory, and the release of new orders on site was limited. Viscose staple fiber manufacturers mainly executed shipments, and the overall market delivery speed was stable.

Price trend

According to the Commodity Market Analysis System of SunSirs, the price of viscose staple fiber remained stable last week (July 8-14, 2024). As of July 14th, the domestic factory price for 1.2D * 38mm viscose staple fiber was 13,500 RMB/ton, which was the same as the previous week's price.

Analysis review

In terms of supply, the production of viscose staple fiber factories remained stable, with an industry operating load rate of around 78%. Some viscose staple fiber factory orders had been signed until mid to late July, and overall shipments were still relatively tight, which had a positive boost to the market.

In terms of cost, the price of the main raw material dissolution slurry remained relatively high and stable. The price of broad-leaved dissolution slurry for domestic enterprises was referenced at 7,700 RMB/ton, and the price for external markets was referenced at 940 US dollars/ton. The price of auxiliary raw material sulfur sulfonic acid continued to rise, providing favorable support for the cost of viscose staple fibers. And the viscose staple fiber industry was in a narrow loss state, with factories showing reluctance to sell at low prices.

On the demand side, the profits of downstream cotton yarn factories had been compressed, and there was a strong resistance to the price increase of viscose staple fibers. The downstream cotton yarn market was relatively weak in keeping up with the rising raw materials, so they purchased viscose staple fibers on demand.

Market outlook

The weak terminal demand continued, and the operating rate of downstream cotton yarn factories was not high. The cotton yarn market was lukewarm. With the arrival of high temperatures, downstream cotton yarn factories might also reduce production, and the demand for viscose staple fibers lacked favorable support. However, some viscose staple fiber factories had relatively sufficient orders, and the sentiment of low price reluctance to sell still existed, resulting in relatively firm offers. The inventory of viscose staple fiber enterprises may remain at a low level in the short term, and the tight delivery situation of viscose staple fiber factories may not be easily changed in the short term, which will have a boosting effect on the market. The market price of raw material dissolution slurry remains stable, providing stable support for the cost end of viscose staple fibers. Overall, it is expected that the market for viscose staple fibers will remain stable in the short term, with limited price fluctuations. The price is expected to be in the range of 13,500-13,600 RMB/ton.

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