Pre-holiday downstream stocking viscose industry is picking up

Pre-holiday downstream stocking viscose industry is picking up

The viscose industry, which was cut in half at a relatively high point, has recently shown signs of recovery. With the slight rebound in viscose prices and the decline in inventories of downstream cotton spinning enterprises, downstream users began to stock up on large quantities of goods before the holiday, waiting for the start of production after the Spring Festival. In this regard, market participants believe that downstream stocking before the holiday reflects improved expectations, and the viscose industry is showing signs of recovery.

Due to the sluggish demand from cotton spinning enterprises, the main downstream users, and the large-scale expansion of the industry in the early stage, the viscose industry maintained an oversupply situation in 2008, resulting in a sharp decline in prices. According to statistics from the China Chemical Fiber Information Network, the price of viscose staple fiber fell from 21,500 yuan/ton at the beginning of 2008 to 11,600 yuan/ton at the end of last year. Enterprise operating rates showed a downward trend, inventories increased, and some manufacturers stopped production.

However, the industry’s imbalance in production and sales turned around in January this year. According to statistics from the China Chemical Fiber Information Network, due to the large increase in downstream orders since December last year, corporate inventories have dropped rapidly, from about 28 days of inventory at the end of November last year to about 9 days of inventory in mid-January this year; viscose staple fiber The mainstream price of 1.5D specification products rebounded from the recent low of 11,450 yuan/ton in early January to 11,550 yuan/ton in mid-January. The operating rate of viscose staple fiber increased slightly, from 75% to about 76%. In terms of filament, since January this year, the price of viscose filament has been stable at around 28,500 yuan per ton. Sales have also improved slightly recently. Downstream manufacturers and dealers have also stocked up a small amount, and the operating rate has increased slightly. However, manufacturers have inventories. Days remain high.

Regarding the recent increase in orders in the viscose downstream industry and signs of recovery, industry insiders believe that the main reason is that its price has fallen sharply relative to its high point, and has entered the psychological acceptance zone of downstream buyers. “The current price of viscose has fallen by half compared to the peak period at the end of 2007. The absolute price level has fallen back to the level of 2003, and the price difference with cotton has also dropped to less than 1,000 yuan.” A raw material buyer from a listed chemical fiber company in Zhejiang said, Downstream users and dealers believe that the current price is relatively low, so they have begun to prepare a large amount of goods before the holiday for use after the Spring Festival.

Analysts also expressed similar views. Fang Jun, a viscose fiber industry researcher at Essence Securities, pointed out that downstream stocking before the holiday reflects expected improvements. “The active stocking of viscose staple fiber downstream before the holiday reflects the change in downstream users’ price expectations for viscose staple fiber from pessimism to optimism, and also reflects confidence in the recovery of demand for low-priced viscose staple fiber. .” Fang Jun said.

However, some analysts are cautious about the prospects of the viscose industry. They believe that the overall operating rate of cotton spinning enterprises, the main downstream users, is still at a low level. At the same time, they will soon enter the Spring Festival holiday period. Based on this, they judge the Spring Festival The actual demand in the market will not pick up significantly before the Spring Festival, and recent orders may be converted into inventory for downstream companies. Whether the industry picks up depends on the actual demand in the downstream industry after the Spring Festival.

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