Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Insights - The demand for viscose staple fiber is expected to grow steadily due to high cotton prices and strong downstream textile consumption [14][15] - The viscose staple fiber industry has seen capacity consolidation since 2021, leading to increased industry concentration [6][26] - The industry is currently experiencing high operating rates and low inventory levels, contributing to a rising price trend for viscose staple fiber [7][39] - The report recommends "Sanyou Chemical" as a key investment target and "Zhongtai Chemical" as a beneficiary of the price increase in viscose staple fiber [43][44] Summary by Sections Demand Side - The apparent consumption of viscose staple fiber is projected to be 3.81 million tons in 2023 and 4.09 million tons in 2024, with year-on-year growth rates of 9.74% and 7.28% respectively [5][14] - The retail sales of clothing and textiles in China reached 742.6 billion yuan in the first half of 2025, showing a year-on-year growth of 3.10% [5][15] - The introduction of new spinning equipment, particularly vortex spinning, is expected to further drive demand for viscose staple fiber [19] Supply Side - The effective capacity of viscose staple fiber has decreased from a peak of 5.13 million tons in 2021 to 4.885 million tons in 2024, a decline of 4.8% [6][25] - The industry has seen minimal new capacity additions since 2021, with a current operating rate of 87.6% as of August 2025 [7][31] - The top three companies in the viscose staple fiber industry hold a combined market share (CR3) of 69.77%, indicating a high level of concentration [26][34] Price Dynamics - The price of viscose staple fiber has been increasing, supported by a favorable supply-demand balance, while the price of its main raw material, dissolving pulp, has been declining [39][41] - The price difference between viscose staple fiber and dissolving pulp has widened, indicating improved profitability for industry leaders [39][41] - The report anticipates that the price of viscose staple fiber will continue to rise due to strong downstream demand and seasonal factors [39][41]