Status quo of China cellulose fiber industry and outlook for next 3 years
！！Kevin Ding, CCFGroup
2019-05-22 11:35:40
Kevin Ding, CCFGroup, delivers his report of Status quo of China cellulose fiber industry and outlook for next 3 years
Mr. Ding¨s report was divided into three parts:
Firstly, the status quo of China cellulose fiber industry: viscose staple fiber industry entered rapid expansion period again, with capacity up by 1100kt within 6 years, the growth rate staying at 20% in 2018 and total capacity up by 790kt in 2018, while the capacity utilization apparently declined, and the industrial concentration rate obviously increased, with the proportion of Sateri, Tangshan Sanyou and Zhongtai totally at 60%. Industrial profitability apparently slipped, and operating rate of different types of plants differed. The situation of Lyocell market was also mentioned. There are 3 official Lyocell manufacturers, 3-5 Lyocell trial production enterprises in China. At least 3 Lyocell enterprises are newly established & under planning at present. By the end of 2019, industry capacity may reach above 100kt/yr. By 2023, industry capacity may reach 1,000kt/yr.
Secondly, he analyzed the development of cellulose fiber industry: Start-up stage, growth stage, maturation stage, recession stage or start-up stage. Competitiveness of enterprises focused on cost, quality, operation and brand. Integration, branding and differentiation was current development tendency. The influence of Sino-US trade war: the continuous growth of the whole industry encountered challenges; the industrial investment growth rate in China faced challenges, and the low-end manufacturing confronted competition from other developing nations.
Finally, Mr. Ding made a forecast for the development of cellulose fiber industry: Driving force to VSF market alters. Consumption of cotton textile feedstock in China is expected to only sustain 1-2% of growth in 2019-2021. Growth pattern of textile industry in China may turn to quality type from quantity type. Growth rate of VSF capacity slowed down, and production growth rate ascended, while the profit still needs test.
In summary: 1. The uncertainty in China¨s and global economy increases, and the expectation for 2019 is neutral and conservative. 2.The growth of China¨s textile industry could slow down further, to around 1.5%. 3. There¨s still staple fiber feedstock supply deficit in China, but the supplement could be diversified, therefore the deficit may not appear. 4. China¨s VSF supply is expected to see substantial increase in 2019. The competition is likely to be fierce in the first half year, but demand could improve in the second half. 5. In the longer term, VSF is still a product with growth potential, but the competition from Lyocell should be noticed.
Mr. Ding¨s report was divided into three parts:
Firstly, the status quo of China cellulose fiber industry: viscose staple fiber industry entered rapid expansion period again, with capacity up by 1100kt within 6 years, the growth rate staying at 20% in 2018 and total capacity up by 790kt in 2018, while the capacity utilization apparently declined, and the industrial concentration rate obviously increased, with the proportion of Sateri, Tangshan Sanyou and Zhongtai totally at 60%. Industrial profitability apparently slipped, and operating rate of different types of plants differed. The situation of Lyocell market was also mentioned. There are 3 official Lyocell manufacturers, 3-5 Lyocell trial production enterprises in China. At least 3 Lyocell enterprises are newly established & under planning at present. By the end of 2019, industry capacity may reach above 100kt/yr. By 2023, industry capacity may reach 1,000kt/yr.
Secondly, he analyzed the development of cellulose fiber industry: Start-up stage, growth stage, maturation stage, recession stage or start-up stage. Competitiveness of enterprises focused on cost, quality, operation and brand. Integration, branding and differentiation was current development tendency. The influence of Sino-US trade war: the continuous growth of the whole industry encountered challenges; the industrial investment growth rate in China faced challenges, and the low-end manufacturing confronted competition from other developing nations.
Finally, Mr. Ding made a forecast for the development of cellulose fiber industry: Driving force to VSF market alters. Consumption of cotton textile feedstock in China is expected to only sustain 1-2% of growth in 2019-2021. Growth pattern of textile industry in China may turn to quality type from quantity type. Growth rate of VSF capacity slowed down, and production growth rate ascended, while the profit still needs test.
In summary: 1. The uncertainty in China¨s and global economy increases, and the expectation for 2019 is neutral and conservative. 2.The growth of China¨s textile industry could slow down further, to around 1.5%. 3. There¨s still staple fiber feedstock supply deficit in China, but the supplement could be diversified, therefore the deficit may not appear. 4. China¨s VSF supply is expected to see substantial increase in 2019. The competition is likely to be fierce in the first half year, but demand could improve in the second half. 5. In the longer term, VSF is still a product with growth potential, but the competition from Lyocell should be noticed.
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