Last week, the market for dissolving pulp—the primary raw material—remained deadlocked. Limited cost support, stable supply fluctuations, low industry inventory levels, and downstream enterprises signing contracts based on demand contributed to a generally calm trading atmosphere. Viscose staple fiber prices primarily consolidated at weak-to-stable levels.
According to SunSirs Commodity Market Analysis System, viscose staple fiber prices remained weak and stable last week. As of September 7, the average market price stood at 13,040 RMB/ton, unchanged from the previous week.
Costs: Raw material dissolving pulp prices showed little change last week, maintaining a weak stalemate with limited cost support. Domestic dissolving pulp currently trades around CNY 6,700/ton, while imported hardwood pulp is priced around USD 800/ton and softwood pulp around USD 870/ton. Auxiliary materials like caustic soda and sulfuric acid remained largely stable with minor fluctuations, providing moderate cost support.
Supply Fluctuations Remain Limited
Industry supply has declined, with current daily operating rates maintaining around 75%. Inventory levels at viscose staple fiber manufacturers have decreased compared to earlier periods. Downstream yarn mills are purchasing according to demand, leading to a reduction in overall viscose staple fiber market inventory. Industry supply fluctuations remain limited, with some manufacturers holding low inventory levels. Support from the supply side is thus limited.
Downstream replenishment driven by essential demand
Downstream viscose yarn market saw a slight increase in operating rates, with prices remaining relatively stable. As of September 7, ring-spun R30S yarn in Jiangsu was priced around CNY 17,100/ton, while ring-spun R40S yarn was around CNY 18,300/ton. The market remains in its traditional off-season, with subdued transactions in the viscose yarn segment. Only select vortex-spun viscose yarn grades saw slightly stronger export orders. Most yarn mills are primarily depleting raw material inventories through essential replenishment, indicating no significant improvement in demand.
Market Outlook
Raw Material Side: The main raw material, dissolving pulp, and auxiliary material, sulfuric acid, are expected to remain largely stable, while liquid caustic soda may see a narrow decline. Consequently, the raw material prices for viscose staple fiber are projected to trend downward in the short term, with insufficient cost support.
Supply & Demand: Viscose staple fiber production capacity utilization is expected to remain relatively stable, with some manufacturers holding high inventory levels. Consequently, supply-side support for viscose staple fiber is anticipated to be weak in the near term. The end-market remains in its traditional off-season with limited new orders. Downstream spinning mills exhibit cautious sentiment, likely maintaining only essential order placements. Demand-side drivers for viscose staple fiber are expected to be moderate in the short term.
Overall, the main raw material dissolving pulp market may remain in a weak stalemate with ample supply. Downstream spinning mills are primarily placing orders based on immediate needs. Amid mixed market sentiment, viscose staple fiber manufacturers are likely to maintain previous quotations. Therefore, SunSirs analysts anticipate the domestic viscose staple fiber market will remain largely stable with minor fluctuations in the short term, with prices expected to range between 12,900-13,100 RMB/ton (acceptance terms).
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