Viscose Staple Fiber Will Brush “Dark Clouds” Aside to See “Sunshine”
Author: May 04, 2011 17:32
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168TEX News: After a crazy fall, viscose staple fiber stops to rebound at the second half of April. Currently, viscose staple fiber market price is maintained at 23500CNY/t, which is about 7000CNY/t lower than cotton price. Apparently, the price difference is too big. According to the survey, at the current staple fiber price level, several staple plants will be limited in its production, which can ease the supply and demand situation.
With the influence of labor force, electric power, capital and weather, demand tardy come occurred. Textile busy season performance is not good. Not until recently, down stream yarn and fabric sales volume gradually runs its quantity, downstream plants operation rate recovered. Thus viscose and staple fiber demand increased to some degree. Demand can always boost viscose and staple fiber price rebound. Viscose staple fiber will brush the dark clouds aside to see the sunshine.
1. Viscose manufacturer suffer a great loss, whose price kick the bottom and rebound up.
Since April, cotton linter, wood pulp price decline has slowed down, cotton pulp price fall sharply. By 26th April, cotton linter price fallen 100CNY/t to 8100CNY/t, wood pulp market price is at $2550/t. Cotton pulp price fallen sharply to 18300CNY/t. See from viscose staple fiber cost, dissolving pulp, paper changed is used as trial since last year, whose amount is about 15% of the raw material. According to the cost of 1 ton viscose, 19090CNY/t, adding on other cost like water, power, other chemical additive and labor cost, thus the cost for 1ton viscose will be 24500CNY/t, then, the cost and market price difference is 1000CNY/t. See from this data, viscose plants are at loss situation now. Compare with viscose staple fiber bottom price, then the price difference is 2500CNY/t. If the price lower again, viscose plants will encounter a 30% outage rate. So, in my opinion, viscose staple fiber price will kick the bottom and rebound up.
2. Funds face pressure, rebound space is constrained.
See from a macro point of view, in order to further tighten the ample liquidity, Bank of China has raised its deposit reserve ratio since the beginning of the year, two times interest rate raise. Although it can refrain the inflation, but the market funds will be tightened and financial burden will be heavier on enterprises. Influenced by the financial pressure, buying power of yarn plants is far less than before. Futures trading terms implementation difficulty and its risk increased for buyers and big orders. Thus caution is the buying trend and the driving force to promote viscose price increase will be weakened. Therefore, it is impossible for viscose price sharp increase.
3. Viscose fiber new resource is forceful
According to data of customs and Bureau of Statistics, the output of viscose fiber (including staple fiber and filament) in January and February, 2011 is 160.7 thousand tons, year on year compare is lower 4.37%; Jan-Feb, viscose staple fiber imported 6.3 thousand ton, exported 16.7 thousand ton, filament imported 0.8 thousand ton, exported 10.5 thousand ton, new resource (output+staple fiber imported+filament imported) 167.8 thousand ton, net resource (new resource-staple fiber exported-filament fiber exported, namely need) 140.6 thousand ton, which indicated China viscose staple fiber has great market potential.
4. Cotton price is likely to fall
Since the beginning of the year, cotton price showed an inverted V type movement, China cotton price hit the peak of 31241CNY/t on 8th Mar, then fall all the way, by 26th April, China cotton price index fall 250 CNY to 28300CNY. The second grade cotton fall 258 to 29667, and the forth grade fall 244 CNY to27376, the fifth grade fall 192CNY to 25730. Cotton spot goods price also continue to fall, market transaction slacks. 26th April, Shandong Weiqiao textile lowered its price again by 500CNY, grade 329 lowered to 27000CNY/t, grade 429 lowered to 26700CNY/t after three days of the first time price reduction. The reduction will further increase the panic mood on cotton weaving manufacturers. Most cotton plants sell out products actively that makes the market over supplied. And cotton price varies from place to place, some cotton enterprises even reject cotton, and the third grade lint cotton is rare on the market.
The price reduction is resulted from the crazy speculation stock in the previous period, now the price is down to the normal level. So the current price reduction is not to say cotton market will be slack, the long term will still mainly be increase. Only for some disadvantage factors, cotton price still has room to fall. Experts believe that cotton price will be fluctuated around 22000-26000CNY/t in the near future.
5. Rayon fabric sales volume increase partially
Although rayon yarn and rayon greige in Xiaoshan and Shaoxing market slacked, finished rayon fabric price rebounded partially, print rayon fabric sales volume increased partially, innovative print fabric price keeps firm, and its sales volume increased distinctively. Especially for rotary screen print rayon fabric, flat screen print rayon fabric, discharged print rayon fabric, embroidery rayon fabric and some other kind of fabrics sales increased distinctively. Such as, 30S×30S、68×68 rayon fabric is still the featured product on the market. The increase boosted the demand for viscose to some degree, so the busy season is on the way, which is a good factor for viscose price rebound.
To sum up, with the increase demand, viscose price has the opportunity to rebound up, but for the whole unfavorable condition, and the non expectable start operation situation, viscose plants should make some relative price modulation at right times. In my opinion, viscose staple fiber will brush the dark clouds aside to see the sunshine.
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Editor: Candy From: 168Tex.com
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