In mid-June, the rayon yarn market revealed a clear split. For 30S ring-spun first-grade yarn, a mill in Xinxiang, Henan quoted 18,200 CNY/ton, while three mills in Weifang, Shandong offered between 17,600 and 17,800 CNY/ton. The maximum regional spread reached 600 CNY/ton. This is not a mere fluctuation but a reflection of diverging cost pass-through efficiency, regional capacity concentration, and buyer sentiment.
The Fundamentals of Price Divergence
Based on public quotes, Weifang Haofang Textile's 17,600 CNY/ton is the lowest for 30S ring-spun first-grade, while Xinxiang Beifang Fiber's 18,200 CNY/ton sits at the high end. Weifang Guanjie Textile and Gaomi Luyuan Textile both quoted 17,800 CNY/ton, in the middle.
This suggests that in Shandong's Weifang, a key rayon yarn production hub, competition is more intense, pricing is more transparent, and mills are more flexible. In Henan's Xinxiang, capacity is less concentrated, giving the leading mill stronger pricing power. The lower Shandong quotes may also indicate higher inventory pressure, forcing faster cash conversion.
Cost Pass-Through Lag and Mismatch
The main raw material for rayon yarn is viscose staple fiber. Since Q2 2026, viscose prices have been weak, reducing cost support for downstream spinners. However, different mills have different procurement cycles and inventory management capabilities, leading to a lag in cost pass-through.
Xinxiang Beifang's 3%+ premium over peers may be due to higher procurement costs or longer inventory turnover. Shandong mills, by contrast, appear more willing to pass on raw material savings to secure orders. This strategic divergence is typical in a weak-demand environment: the first to cut prices often gets the limited orders.
Regional Capacity Structure Determines Pricing Power
The rayon yarn industry is regionally concentrated. Weifang, Shandong, hosts multiple large mills, creating fierce competition. In such a market, no single mill can sustain a price significantly above the average without losing customers.
In Henan, capacity is more dispersed, and Beifang Fiber enjoys a local scale advantage, giving it greater pricing leverage. However, sustained high quotes depend on customer acceptance. If low-priced Shandong supply flows into Henan, local mills will be forced to follow.
Real Temperature of Downstream Demand
Downstream fabric and garment mills remain cautious, with orders characterized by short runs and small lots. Rayon yarn, as an intermediate product, is price-sensitive, and buyers are closely watching for bargains.
A 600 CNY/ton spread represents a significant cost difference. For fabric mills with thin margins, every yuan saved matters. This naturally draws buyers toward lower-priced Shandong supply, reinforcing downward pressure on prices there.
Short-Term Outlook
Over the next 2-4 weeks, rayon yarn prices are likely to remain weak. Viscose prices lack upward momentum, and downstream demand shows no signs of recovery. Regional spreads may widen further: Shandong mills could cut prices again to gain market share, while Henan mills risk inventory buildup if they hold firm.
For buyers, the priority should be monitoring Shandong daily quotes, with phased purchases to lock in low prices. For producers, the challenge is balancing profit margins and market share.