Since viscose staple fiber weakened in mid-October, the price of viscose staple fiber has dropped from a high of 16,150 yuan/ton to 14,200 yuan/ton, a drop of 1,950 yuan/ton.
During the same period, various raw and auxiliary materials basically did not fall significantly, and some even saw sharp increases. Taking caustic soda as an example, the price was still at a slightly high level of 3,000 yuan/ton in early September, but by October it was as high as nearly 5,000 yuan/ton. The cost per ton of viscose increases by more than 1,000 yuan. Although some raw and auxiliary materials have softened since the second half of November, the decline is not obvious, and some are still higher than the price levels in early October.
Affected by pessimism since last weekend, the large order prices of some viscose companies have loosened again. The lowest price in East China is 14,000 yuan/ton, and the lower one-year acceptance price for large orders in Xinjiang is 14,000 yuan/ton. From the buyer’s perspective, this price is basically equivalent to the June acceptance price of 13,650 yuan/ton. Although some companies listed for sale have stable nominal prices, they will generally suffer losses if the settlement price at the end of the month is based on the market price. According to estimates, half of viscose companies have negative cash flow.
Negative cash flow is definitely not just a statistically significant number. It will directly affect the willingness of companies to start up. Since last weekend, many companies have arranged maintenance. Within a week, the industry load has dropped by 5 points. The latest short-term load index has dropped to 83, close to the level during the environmental protection inspection in August.
The viscose market has been declining. What do you think of the viscose market in the future? Listen to the opinions of several major viscose upstream and downstream companies in the industry.
Jiang Wenbin, Marketing Director of Fujian Changyuan Textile Co., Ltd.: The price of viscose staple fiber is still falling, and many spinning mills still have relatively large viscose yarn inventories. Judging from the inventory situation, it is not ruled out that textile mills sell goods at any cost. It takes a process to digest the inventory. The current market situation can be seen by the end of this month. There are currently no signs of a major rebound. Traders’ stocking up at the end of the year will begin at the end of this month. At present, some traders have begun to stock up in advance and build positions in batches. In order to avoid risks, many factories in Changle, Fujian have changed their viscose workshops to other varieties.
Zheng Shengwei, manager of the Information Department of Zhejiang Huarui Information: The price of viscose staple fiber is 14,000 yuan/ton, which seems to be the low point of the year, but the demand is generally followed. In addition, everyone expects that the new production capacity will have an impact, so this price is a bit high. Sateri may put 160,000 tons of production capacity into operation by the end of the month, and Fulida Xinjiang’s 200,000 tons will be put into operation in about the same time.
Wang Shumiao, Purchasing Director of Hangzhou Yongfang Textile Co., Ltd.: My personal opinion is that it is difficult to rebound in a short period of time. The main reason is that there is no power to rebound. First, downstream orders are not very abundant, and the demand for yarn is not very urgent. Second, the overall viscose staple fiber inventory is sufficient. Recently, the maintenance of viscose staple fiber equipment has increased significantly, and the number of stops and cuts has increased. , the time part is as long as 1 month.
Dong Ping, Marketing Director of Birla Fiber: Our company’s prices have been stable recently. Generally speaking, there will be a low ebb in the near future. However, with the overall production and capacity reduction of mainland raw material companies, a rebound cannot be ruled out.
Xie Fang, Marketing Director of Fangdao 1707: I am not optimistic at the moment, but I am still optimistic that there will be a wave of market trends. According to the rules of previous years, the decline generally stops in December and starts to rise around the middle of the year. It is recommended that if there is demand for customers, they can choose the appropriate price point to enter.
Chen Jian, Marketing Director of Fujian Jinyuan Textile Co., Ltd.: The market will be bearish until the end of December, and there should be a rebound at the end of the month. As for the size of the range, it depends on your inventory situation and downstream order demand.
Viewpoint: Although there will be large new production capacity in the later period, as far as December is concerned, these new production capacities will not be able to form effective production for the time being. As the load on existing installations drops significantly, supply may drop significantly. Although some companies currently have large inventories, they are not eager to sell these inventories at cash flow levels once the panic atmosphere eases. However, the inventory of raw materials is generally low in the downstream. If there is just demand, the market may bottom out at any time, or even rebound slightly.
Another reason to support bottoming out is that after two months of decline, rayon products have significantly improved their cost performance compared to cotton and polyester products, and the rigid demand for some terminals has also begun to increase. The main reason affecting the release of demand is the psychological worries caused by the trend.
Of course, cash flow is not a fixed number. Looking at the longer term, cash flow levels are still likely to decline. With the existence of new production capacity, we cannot conclude that viscose staple fiber has bottomed out in the long term. But as far as December is concerned, the market should not be overly bearish, and there is no need to be too cautious for some stocks that are just in need of replenishment.
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