Core Viewpoint - The report from Guojin Securities indicates that the viscose staple fiber industry is experiencing increasing concentration on the supply side, with limited new capacity in the short to medium term, while demand is expected to grow due to seasonal factors and rising production of non-woven fabrics [1][2]. Supply Side - The industry is witnessing a decline in production capacity, with a peak capacity of 530,000 tons in 2021, which has since decreased to approximately 481,500 tons by 2024, representing a reduction of about 48,500 tons or 9% [1][2]. - Policies have been implemented since 2017 to restrict energy consumption and pollution, leading to the exit of 55,500 tons of capacity from the market [2]. - The market concentration has improved significantly, with the top three companies holding a combined market share of 72% in 2024, up from 27% in 2014 [2]. Demand Side - The apparent consumption of viscose staple fiber has shown steady growth, increasing from 2.93 million tons in 2014 to 4.23 million tons in 2024, with a compound annual growth rate of approximately 4% [3]. - As of late July, the inventory days for viscose staple fiber were around 7.5 days, indicating a relatively low stock level, while the operating rate has remained high at 85% [3]. - The cotton sales rate for the 2024/25 season reached 96.5% by July 24, 2024, which is a 7.6 percentage point increase year-on-year, suggesting strong demand conditions [3].