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Viscose Staple Semi Annual Report: All Kinds Of Embarrassment At Historic Low Prices

2020/7/7 15:58:00 0

Viscose Staple FiberPriceMarket

Viscose staple has experienced 4 consecutive falls in 2019, and the market is in urgent need of a rebound or even reversing the market to lead the industry chain to rest and breather, but things are impermanent. In 2020, the industry was affected by the new epidemic situation. The pressure from the bottom up of the industrial chain forced the price of viscose staple fiber in the first half of 2020 to once again refresh a new low. At the same time, the new low price is also highlighting the high inventory and negative profits of the industry. Moistening and low starting all kinds of embarrassment.

The epidemic has made the market worse, and viscose staple prices have set a new low.

Viscose staple fiber has experienced 4 consecutive fall in 2019, during which the intensity of the rebound has been slightly more than once. This year we should be breathing. But since the beginning of this year, public health and safety incidents have broken out in China. The chain of the lower end of the textile industry has stopped obviously. Until February 10th, the industry starts to improve gradually, but the textile enterprises have just entered the production line, but not long. Overseas reentry into a deeper and more serious situation, which is even more pressing for the textile industry, which is more dependent on exports. At this stage, the price of viscose staple fiber and cotton yarn has both set a new low. According to the statistics, in 2020 1-6, the average price of viscose staple fiber dropped to 9356.47, compared with -25.37%, R30S (ring) in the first half of the year, the average price was 13241.71 yuan / ton. Year-on-year -23.96%.

Volume and price fell, viscose staple cash flow negative situation is also expanding.

During the past 2015-2017 years, the cash flow of viscose staple fiber maintained a good momentum, mainly due to supply side tightening. However, with the increase of profits, viscose staple fiber preparation and production increased, the market began to gradually enter the imbalance between supply and demand, and drove cash flow to decline year by year. Until the 2019-2020 year, the situation of viscose staple fiber prices continued to fall, accelerated the situation of industry losses. By the 1-6 month of 2020, the cash flow of viscose staple fiber has been reduced to -459.71 yuan / ton, up from -305.11%.

But the seriousness of the problem is not the loss of viscose staple, but the fact that the whole chain is almost unprofitable. For its main downstream cotton yarn, the processing fee is also decreasing year by year. According to statistics, in the 1-6 month of 2020, the average processing fee of R30S (ring) in the first half of the year was 3885 yuan / ton, down 20.37% compared with the same period last year. The cost pressure of upstream dissolving pulp is forcing domestic pulp factories to stop production.

In 2020, viscose staple fiber production capacity was limited, but capacity utilization rate dropped to the lowest level.

Following the completion of the second 125 thousand ton / viscose staple fiber new line in Jiangxi in the first half of 2020, it means that the new capacity of viscose staple fiber has been coming to an end in the past 5 years. According to statistics, the total production capacity of viscose staple fiber in the first half of the year was 5 million 245 thousand tons (including Taiwan), and the capacity increased by only 1.06% (excluding inefficient production). Compared with the 2019 capacity growth rate, it dropped by nearly 8 percentage points, but even though the growth rate of viscose staple fiber declined, but the demand was shrinking, the utilization rate of viscose staple fiber in 2020 decreased to 68.04%, down 8.79 from the same period last year. Percentage point.

In the 1-6 months of 2020, the production of viscose staple fiber in mainland China was 1 million 751 thousand and 300 tons, down 187 thousand and 300 tons, down 9.66% from the same period in 2020 of 2020.

In the 1-6 month of 2020, the output of viscose staple fiber in mainland China dropped by 9.66% over the same period last year. But during the first half of the year, the spinning enterprises first came to the Qingming May 1 holiday after experiencing the frequent Spring Festival holidays. Even during the Dragon Boat Festival, some enterprises also opt for a leave of absence. The export led by the outbreak forced the cotton spinning enterprises to alleviate some pressure by using various holiday intentions, according to statistics of 2020. In 1-6, the average starting rate of the cotton yarn industry was only 59%, down 21 percentage points over the same period.

Viscose staple fiber is not only subject to the direct downstream of the domestic demand for shrinkage, but also the external factors directly affect the shrinkage of viscose staple products exports.

Therefore, the imbalance between supply and demand, viscose staple fiber in the first half of the finished product inventory continued to maintain high. According to long Zhong information statistics, during the early May 2020, the finished product inventory of viscose staple fiber factory was as high as 390 thousand tons or more, and the inventory days were 27.3 days. But if the factory's production period was equal to the daily production, the stock days could be as high as 43 days.

Outlook for the future

The first half of the year is fleeting, but at present, the outbreaks have not yet been twisted, which still brings more risks and uncertainties to the textile raw material market. Viscose staple fiber industry is also facing greater challenges.

The first half of the year is not good enough. Cash flow is tight or suppressed in the second half of the year.

After a long period of limited production and bidding, most of the cotton yarn enterprises in the first half of the year are in a small profit or even a loss situation, and the current external epidemic is repeated, and at the same time, the value of domestic sales is off-season. The cotton yarn industry is reappearing in the bidding state. However, under the influence of limited processing fees, if the factory increases its bid price again, it will cause its own losses, but if the inventory of the finished products in the current price industry is increased or increased, The current high temperature and humidity weather, so in the face of many contradictions in mind, the cotton textile enterprises in mid July will begin to increase production again intention, and then superimposed on the factory for a long time without profit or even loss operation in the first half of the year, will lead to greater pressure on cash flow of cotton yarn throughout the whole year, so whether it is the cotton yarn competition or production reduction in recent months, or the annual cash flow restrictions, or inhibit the yarn business. Purchase demand for viscose staple fiber.

Worry two. Viscose staple product inventory or growth again

At present, the finished product inventory of viscose staple fiber factory has declined compared with the beginning of 4 and the beginning of May, and is approaching the new node of the downstream viscose staple fiber. Once demand is followed, the growth of the viscose staple fiber can be suppressed, but the demand is likely to be described as well. In the first half of the year, the industry's opening rate is likely to be in a relatively stable state in the second half of the year.

The supply side is relatively stable, and the demand side is insufficient, so the finished product inventory of viscose staple fiber factory is likely to grow again. However, in view of the current factory execution order, it is expected that a number of enterprises will be executed in the middle of the year, and the pressure of inventory will be again in the late July to the end of the month.

Worry three: lack of confidence, speculative demand reduction

The so-called confidence is attributed to gold, but since the second half of 2018, frequent traders consider viscose staple fiber "historical low price" and continue to decline in limited space and start buying, but no return or even loss, the confidence of the industry has been killed again and again, and with the reason that "epidemic situation will eventually end", 4-5 months of speculation and stockpiling of customers have been faced with epidemics in 6-7. The situation is once again high and cautious, and confidence is expected to be established. However, the market expectation is obviously insufficient. But if viscose staple producers choose to make a big price for risk aversion, though speculators can still buy viscose on the basis of "historical low price", the viscose staple fiber factory will also increase its own deficit and slightly run out of money.

However, judging from the industry situation, viscose staple fiber industry has gone through 2 years of decline, and after the industry has no clear new capacity, it is expected that the price of products will also be gradually restored to value. Therefore, it is estimated that the price of viscose staple fiber is still at a low level in the second half of 2020, but after 3 quarters of entanglement, it is estimated that the price of viscose staple fiber will gradually become worse in the 4 quarter. Tail.

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