Against a complex macro environment and ongoing supply chain restructuring, competition in the cellulose fiber industry has intensified in 2025, though structural opportunities remain. Enterprises should prioritize survival while seeking steady progress. Over the past two decades, capacity expansion has shifted from viscose staple fiber to lyocell. With improved domestic equipment and larger single-line capacities in China, lyocell has entered rapid growth.

In Q1 2026, cellulose fiber output grew year-on-year, with viscose staple fiber utilization rate hitting nearly ten-year high. Low inventories and strong pre-sales point to robust demand. However, rising costs of raw and auxiliary materials and dissolving pulp have limited profit improvements. External factors are also at play. The Middle East conflict has raised logistics costs, and suppressed demand. Small-batch fast-response models, e-commerce, and thinner textile margins have weakened fiber pricing power, narrowing price volatility.

Over the past 20 years, larger single-line scales and process improvements have boosted efficiency and cut costs for viscose staple fiber. But as clothing's share of household spending declines, traditional fiber demand faces upgrading pressure.

Despite slowing economic growth, cellulose fiber consumption is still expected to grow about 1% in 2026, with the five-year growth forecast raised to 10 million tons. A recovery in China's domestic demand and better-than-expected exports offer opportunities for growth in both markets.

Rapid lyocell capacity expansion is reshaping supply-demand dynamics. The 2026 outlook is moderately optimistic, but global uncertainty, supply chain volatility, and concentrated capacity releases could increase market fluctuations. Enterprises must pursue differentiation to escape homogeneous competition and improve profitability.