The benchmark price of viscose staple fiber 1.2D reached 14,200 RMB/ton on July 1, 2026, marking the highest level in the past 12 months and representing an over 11% increase from the year's low. For rayon yarn spinners and fabric producers relying on this raw material, this price signal indicates that cost-side pressure has shifted to a new equilibrium level.
Looking at the timeline, this rally is not sudden. Compared to a year ago, viscose staple fiber was trading around 12,800 RMB/ton in early July 2025. It experienced a moderate recovery in the second half of 2025, rebounding to around 13,500 RMB/ton by early 2026, and accelerated past the 14,000 RMB/ton threshold in Q2 2026. The current price is over 5% above the one-year median of 13,500 RMB/ton and nearly 1,000 RMB/ton above the average of 13,200 RMB/ton, indicating a significant upward shift in the price center.
Cost and Supply Side: Dual Tightening Supports Price Floor
The core driver of this rally comes from upstream. Dissolving pulp, the primary raw material for viscose fiber, saw its international prices rise steadily in the first half of 2026 due to tight global wood chip supply, directly pushing up production costs. Meanwhile, some domestic viscose staple fiber production units entered regular maintenance periods in Q2, keeping industry operating rates at 70%-75% without significant output increases.
Another key variable on the supply side is inventory levels. Industry data shows that social inventories of viscose staple fiber were at mid-to-low levels in late June 2026, with some major mills holding less than 15 days of stock. This low inventory environment gives sellers an advantage in price negotiations, further consolidating the firm price trend. From an annual perspective, the current price of 14,200 RMB/ton has hit the one-year high, with a spread of 1,400 RMB/ton from the low of 12,800 RMB/ton, representing a fluctuation range exceeding 10%—uncommon for a relatively mature chemical fiber variety.
Demand Side: Rayon Yarn Market Diverges, Purchasing Decisions Cautious
On the other side of the price coin, downstream acceptance is being tested. The rayon yarn market, which primarily uses viscose staple fiber as raw material, showed clear divergence in Q2 2026: conventional ring-spun rayon yarn varieties passed on price increases relatively smoothly, while differentiated products and low-count yarns lagged. This means profit margins for some spinners are being squeezed, especially for small and medium-sized mills with limited bargaining power.
In terms of purchasing rhythm, after viscose staple fiber prices broke through 14,000 RMB/ton, restocking sentiment among downstream companies diverged significantly. Large textile groups with stable orders tend to maintain normal purchasing schedules, but smaller mills adopt a hand-to-mouth strategy, actively reducing raw material inventories to hedge against price correction risks. This wait-and-see sentiment became evident in late June, leading to a drop in daily transaction volumes compared to May. However, due to overall low inventory levels, even temporary demand weakness has not substantially pressured prices.
Price Outlook: High-Level Consolidation Unlikely to Break Soon
Looking ahead to Q3, viscose staple fiber prices are likely to fluctuate narrowly within the 14,000-14,500 RMB/ton range. Supporting factors include: upstream dissolving pulp prices are unlikely to fall sharply in the short term, limited room for industry operating rate increases, and potential production disruptions in some regions due to summer peak electricity demand.
Factors capping further price gains also exist. Whether downstream rayon yarn demand can sustainably absorb high-priced raw materials is key to determining if viscose staple fiber prices can break higher. If textile and apparel export orders disappoint in Q3, rayon yarn inventory pressure may feed back upstream, prompting a technical correction in viscose staple fiber prices. Additionally, expectations of new capacity additions are also dampening speculative buying.