On August 28, the benchmark price of viscose staple fiber 1.2D settled at 14,400 CNY per ton, up 1.41% from the beginning of the month and hitting the ceiling of the past 12 months. For buyers, this means raw material costs have risen 12.5% from the January low of 12,800 CNY per ton. Industry data also shows that the current price has triggered both the two-year and three-year overbought warning thresholds, signaling potential sustainability concerns.
Price Trends and Cost Logic
Over the past year, the average price of viscose staple fiber was 13,395.08 CNY per ton, with a median of 13,600 CNY. The current price is 7.5% above the average, placing it in a strong upward range. Although the daily increase of 0.42% seems modest, a steady climb over many days often reflects more fundamental shifts in supply-demand dynamics than a single sharp jump.
Viscose staple fiber's upstream input is dissolving pulp, which accounts for 60%-70% of total production costs. Recently, global wood pulp markets have been affected by logistics disruptions and stronger paper pulp futures, pushing spot quotations higher and directly raising costs for viscose producers. Meanwhile, downstream demand for rayon yarn and blended fabrics has rebounded notably since Q3, especially with restocking demand from home textiles and apparel exports. This has kept the production-sales ratio above 90% and inventory levels low.
Industry Transmission and Procurement Strategy
A high price level means different things to different players. For viscose fiber manufacturers, the current price offers improved profit margins—at 14,400 CNY per ton, most plants can cover variable costs and earn some profit. However, the daily rise of 0.42% and the overbought warnings suggest possible sentiment-driven premiums. If downstream acceptance weakens, prices could correct quickly.
For weaving mills, raw material costs account for 60%-70% of greige fabric costs. Every 100 CNY increase in viscose staple fiber raises rayon yarn costs by about 150 CNY per ton. Currently, rayon yarn prices have lagged behind raw material increases, squeezing yarn mill margins. Some small and medium weavers have started reducing viscose usage and increasing blends with polyester or cotton. If this substitution effect persists, it could dampen further upside for viscose.
From a regional perspective, operating rates in major viscose production areas like Jiangsu, Shandong, and Fujian remain around 85%. However, the release of new capacity in Xinjiang has been slower than expected, limiting near-term supply growth. At the same time, export quotations for viscose staple fiber have also risen, causing Southeast Asian buyers to slow their purchasing pace, which could become a pressure point later.