Summary of Conference Call on Viscose Staple Fiber Market Outlook Industry Overview - The conference call focused on the viscose staple fiber market, particularly the nylon staple fiber segment and its dynamics in China and globally [1][2][3]. Key Points and Arguments Nylon Staple Fiber Market - Despite a decline in total production capacity, the nylon staple fiber market is experiencing growth due to increased capacity utilization, with production expected to reach approximately 4.35-4.4 million tons in 2024-2025 [1][3]. - The growth is driven by the widespread adoption of vortex spinning technology and increased demand in the non-woven fabric sector, particularly for spunlace non-woven fabrics [1][4]. - Current total capacity for nylon staple fiber in China is around 4.86 million tons, with the top three companies holding over 70% market share [2]. Viscose Market Dynamics - The viscose market is facing a tightening supply-demand situation, with total supply and consumption around 4.5 million tons, and potential consumption growth to 4.7 million tons [1][5]. - The industry is operating at high capacity utilization with low inventory levels, indicating a near bull market status [5]. - Downstream bargaining power remains weak, leading to cautious price increases by manufacturers [1]. Lyocell Fiber Market - The lyocell fiber market is expanding rapidly, currently at about 790,000 tons, but its impact on nylon staple fiber is limited, especially in denim and home textile sectors [1][6][7]. - Lyocell's price advantage has allowed it to replace some nylon staple fiber in specific applications, but the overall impact remains minimal [7][8]. Dissolving Pulp Market - The global dissolving pulp market has seen an increase in capacity, primarily from swing facilities that can produce both dissolving pulp and paper pulp [9]. - Due to falling paper pulp prices, more facilities are shifting to dissolving pulp production, with prices expected to continue declining [9]. Cost and Production Insights - Some companies are substituting paper pulp for dissolving pulp in viscose staple fiber production, reducing costs by approximately 1,000 yuan per ton without significant performance differences [10][33]. - The overall cost structure in the viscose industry shows a complete cost of about 12,800 yuan per ton, with manufacturing costs around 6,000 yuan per ton [25]. Market Challenges and Future Outlook - The viscose industry is currently in a phase of "anti-involution," where despite conditions favoring price increases, the market's small order and quick return model limit price flexibility [26]. - The future price elasticity of the viscose market will depend on demand growth and supply changes, particularly from vortex spinning technology and new capacity [29]. Competitive Landscape - The viscose staple fiber market is facing competition from polyester staple fibers, which have gained market share in recent years [31]. - The profit distribution within the viscose supply chain shows that dissolving pulp accounts for 55-60% of total profits, while viscose staple fiber production captures about 30% [32]. Additional Important Insights - The macroeconomic environment remains unpredictable, with geopolitical tensions affecting trade dynamics [11]. - The industry has not seen significant new capacity additions in recent years, with the only notable project being by the Golden Light Group, expected to come online by 2027 [21]. - The industry's exit of some capacities is primarily due to poor management rather than environmental regulations [23]. This summary encapsulates the key insights from the conference call, highlighting the current state and future outlook of the viscose staple fiber market, along with competitive dynamics and cost structures.

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]