Since the main viscose staple fiber contract price hit a stage high on December 26, 2025, the market has entered a fluctuating downward channel. This round of decline is primarily driven by dual factors: weakened cost support and persistently sluggish demand. Considering current facilities operating at high capacity utilization rates, coupled with the downstream sector facing an off-season for consumption and limited cost-side support, the market lacks upward momentum in the short term.

Profit-Driven Adjustments Shift Focus to Equilibrium

Throughout 2025, macroeconomic weakness and loosening upstream cost support caused chemical sector prices to shift downward overall, with polyester chain products experiencing synchronized downward pressure. Against this backdrop, processing profit margins in the viscose staple fiber industry were continuously compressed, frequently falling below the cash flow cost threshold for many enterprises. This made industry operating rates the core mechanism for market self-regulation: when profits deteriorated, enterprises proactively reduced production to alleviate supply pressure and support prices, dynamically maintaining market equilibrium.

Entering 2026, although domestic viscose staple fiber profit levels remain significantly below those of the same period in 2025, they have shown a clear recovery trend compared to the lows at the end of 2025, driven by the rebalancing of supply and demand across the industrial chain. According to SteelHome data, as of the week ending January 15, 2026, domestic viscose staple fiber profits stood at -155.65 yuan/ton, marking a 39.17% increase from the beginning of 2026. This marginal improvement primarily stems from the temporary stabilization of upstream raw material prices, which has mitigated cost pressures.

As signals of profit recovery emerged, market adjustment mechanisms responded swiftly. By the third week of 2026, the operating rate in China's viscose staple fiber industry had rebounded significantly to 90.86%, a recent high, with weekly output reaching 173,200 tons—a 0.29% week-on-week increase. This phenomenon clearly demonstrates the effectiveness of the “profit-operating rate” endogenous market adjustment mechanism: the current profit improvement stems not from robust terminal demand, but primarily from the supply side's sensitive response to price signals and proactive adjustments. This market-driven adjustment mechanism demonstrates its effectiveness: the current profit improvement stems not from robust terminal demand, but primarily from the supply side's responsive and proactive adjustments to price signals.

The establishment of this mechanism signals a shift in the market's primary contradiction. Whereas the past conflict centered on the direct tug-of-war between “cost pressures and processing profits,” the market's core tension will now pivot toward whether a new dynamic equilibrium can be achieved between “rapid elasticity in supply-side release” and “actual absorption capacity of end-demand.”

Demand Enters Seasonal Off-Peak Period

The downstream textile industry chain has now fully entered a systematic contraction phase ahead of the Spring Festival, with demand support for viscose staple fiber rapidly weakening. This trend is driven by two factors: First, the seasonal slowdown in production pace. As the Spring Festival approaches, operating rates in yarn spinning and weaving segments are routinely reduced, leading to a corresponding contraction in rigid procurement demand for viscose staple fiber as a raw material. Second, the “gap period” in the end-user order cycle. With overseas Christmas and domestic New Year orders largely fulfilled, and spring orders—which determine post-holiday production—yet to be placed on a large scale, a distinct “demand vacuum” has emerged. .

Consequently, the market's pivotal turning point may occur after the Spring Festival. At that time, market momentum will hinge on two critical variables: first, the actual scale and pace of new spring orders being finalized, which form the foundation for demand recovery; second, downstream enterprises strategically adjusting raw material inventory levels based on their new order intake.

Cost-side volatility may intensify

Viscose staple fiber prices exhibit strong correlation with raw materials PTA and ethylene glycol, with the PTA correlation coefficient consistently above 0.85 in recent years.

Currently, PTA pricing is primarily anchored to crude oil markets. From a crude oil fundamentals perspective, global oil inventory pressures remain pronounced in Q1, with supply excess serving as the core factor suppressing oil price levels. However, recurring geopolitical tensions may trigger short-term volatility in oil prices, disrupting the cost dynamics for PTA and viscose staple fiber. It is important to note that while a sharp escalation of geopolitical risks could spark a pulse-like surge in oil prices, its sustainability would remain constrained by the underlying surplus fundamentals.

Looking ahead, the viscose staple fiber market is unlikely to break free from its volatile pattern in the near term. On one hand, ample supply and seasonal demand weakness persist. On the other, cost support remains limited, leaving the market awaiting new drivers. The strength and pace of post-Spring Festival recovery in end-user demand will be pivotal in disrupting the current equilibrium and setting the direction.

As an integrated internet platform providing benchmark prices, on January 20th, the benchmark price for 1.2D viscose staple fiber, according to SunSirs, was 12800.00 RMB/ton, a decrease of 0.78% compared to the beginning of the month (12900.00 RMB/ton).

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