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Cellulose fiber market analysis under new round of capacity expansion peak
°™°™Ding Jingqi, manager and industry analyst of CCFGroup

2018-05-23 14:43:01
Ding Jingqi, manager and industry analyst of CCFGroup, presented his report of Cellulose fiber market analysis under new round of capacity expansion peak 
Mr. Ding's report is divided into three parts. 
In the first part, Mr. Ding reviewed the VSF industry operating and capacity expansion. Ding started from the contradiction between the growth of resources and human needs in the popular movie "Avengers III", introduced the growth of production capacity of viscose staple fiber, and pointed out the rapid growth of production capacity and the further improvement of industrial concentration. 

In the second part, Ding talked about the changes in the coordination of the value chain. Ding first pointed out that the instability of the upstream and downstream matching of fibers decided that demand could be shaped and it was cyclical. On the supply side, through the analysis of various raw materials, Ding pointed out that there were few problems in supply. In terms of market demand matching, the growth in the later period would no longer be dominated by the growth of the overall bank, but would be based on structural growth. 

The third part was all about raw material. First, Ding outlined the supply and demand situation of the three major textile raw materials and paid attention to the cotton market and the polyester market, which have recently undergone major price changes. It is believed that there is little probability that there will be a large increase in China's cotton supply in the later period. Although the overall volume of polyester staple fiber used for spinning has increased in recent years, the growth rate has continued to decline. Although PSF has certain price advantages, it lacks competitiveness over PFY. In the future, the application of PSF may be reflected in the blending process. Ding also compared the characteristics of the three major textile materials, explained the export situation of textiles and garments, and looked forward to the possible changes in future market trading patterns. 

Finally, Ding concluded that in the current global economic environment, the era of high growth in China's textile and apparel industry is over. The consumer side may even shrink. China's yarn capacity is expected to grow at a low speed in the future, driving the continuous growth in cotton spinning raw material consumption. VSF is expected to be the most important source to meet downstream demand. However, VSF capacity expansion in 2018-2019 will be significantly higher than downstream demand growth. The industry may witness a periodical digestion phase. The value chain may tends to be imbalanced, but VSF might see more demand through hard work. After VSF industry scale and concentration increase, the trading model may change in the future. 

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