What is the reason for the loss of 80% viscose enterprises?

Shandong Hailong, the former leader of viscose, was restructured due to deep losses. This heavy news has caused waves in the industry recently. Many people are also worried about the prospects of their respective companies and are even more concerned about the prospects of their respective companies. After all, under the current situation where more than 80% of the viscose fiber industry is losing money, everyone is in danger.

Perhaps in the second and third month of this year, when the price of cotton rose, viscose fiber companies secretly sneaked and prepared to accept orders transferred from cotton mills. However, as of now, the extent of shrinking downstream demand is surprising. In order to limit the production price, the overall operating rate of the industry remained at 65% to 70%, but the viscose fiber prices are still falling, and 21,000 yuan/ton has not yet reached the bottom.

The sharp fluctuations in prices directly led to the loss of the viscose fiber industry, why the industry's losses in a short period of time? In an interview with reporters, people in the industry generally believed that the sharp fluctuations in the prices of products and raw materials were the most direct reasons.

When analysing the significant impact of fluctuations in raw material prices on the viscose industry, it is necessary to state once again the raw material structure and supply and demand conditions of viscose fibers. More than 90% of the domestic viscose industry originally used cotton pulp as raw materials. These pulp mills are relatively scattered, with large quantities and small scales, and they have no control over raw materials and quality is difficult to guarantee. After 2000, domestic viscose fiber production capacity continued to expand, but cotton pulp was restricted by limited resources of cotton linters and it was difficult to achieve large-scale expansion. The output was only between 600,000 and 700,000 tons. A large amount of wood pulp was imported to meet the demand. By 2010, the proportion of wood pulp in the domestic viscose industry has exceeded 60% of that of cotton pulp, while the dependence on wood pulp imports remains high (more than 90%), and the pricing power is completely in the hands of foreign related companies.

The reporter looked up a set of data from authoritative websites in the industry: On June 1st, the price of 1.5D*38mm viscose fiber was about 21,000 yuan/ton; at the beginning of May, the price was about 24,000 yuan/ton; at the beginning of April, the product Prices are basically 27,000 yuan / ton; the end of February to March, the price up to 28,500 yuan / ton. In terms of viscose raw materials, on June 1, the price of imported dissolving wood pulp was about 14,000 yuan/ton, and that of cotton pulp was about 13,000 yuan/ton; on May 1, the price of imported wood pulp was about 19,000 yuan/ton. The price is about 18,000 yuan/ton; on April 1 and March, the price of imported wood pulp is about 21,500 yuan/ton to 22,500 yuan/ton, and the price of cotton pulp is about 21200 yuan/ton.

From the above data, it can be seen that after the Spring Festival in February, the price of viscose fiber and raw materials maintained a high upward trend, which continued throughout March. However, since late April, the price of related products has continued to plummet, and it is still not showing signs of improvement. If you use the current raw materials to produce products and sell them immediately, the viscose business will not lose money. However, the key issue is that the product production requires a process that requires early stocking of raw materials, while the viscose fiber production cycle is relatively long, and the raw material procurement cycle may even reach 3 months.

Many manufacturers will calculate such an account for reporters: Most manufacturers still use the high-priced raw materials purchased in February and March for production in May. At that time, the raw material price of about 21,500 yuan/ton was already higher than the current 21,000 yuan of viscose fiber. The price of tons. The cost of processing, transportation, and other costs have not yet been calculated. Viscose companies have no doubt lost money.

Overcapacity "was highlighted"

Many people frankly stated that the current operating conditions of the viscose industry can be regarded as extremely bad in the chemical fiber sub-sectors. The rapid decline in the prices of related chemical fiber products and raw materials caused by the sharp drop in cotton prices is the direct cause of the loss of the viscose industry, but it is by no means the only reason.

The relevant person in charge of Tangshan Sanyou Xingda Chemical Fiber believes that the rapid expansion of production capacity has aggravated the difficulties in the operation of the industry. In his view, the rapid expansion of viscose fiber production capacity in recent years is far greater than the growth in downstream demand. The phenomenon of oversupply is more pronounced and competition in the industry is intensifying. At the same time, a large amount of new production capacity requires raw materials for pulp to maintain production, making the supply of already stretched raw materials even more difficult. According to relevant statistics, the viscose industry plans to increase production capacity by several hundred thousand tons in the past two years.

Others have different opinions. Tian Ke, Secretary General of the China Chemical Fiber Association's Viscose Specialty Committee, pointed out that the problem of overcapacity in the viscose industry is "highlighted." In his opinion, the planned increase in new production capacity will be partially difficult to put into production for various reasons. At present, the excess production capacity of more than 100,000 tons is not that much. It is equivalent to only 20 days of inventory in the industry, and it is also conducive to maintaining the stable supply and demand of products. relationship. However, this year's unusually volatile prices have on the one hand led to a surge in raw material pulp that is highly dependent on imported raw materials, and on the other hand have dampened downstream demand. The co-extrusion of the upstream and downstream of the industrial chain has caused the intermediate link of viscose fibers to be “expanded”, and the excess capacity seems to be seriously worse.

Downstream raw material prices "tolerate"

As to why the demand has shrunk, most voices believe that this is a collective resistance of the downstream raw material prices.

Since last year, the price of cotton-based textile raw materials has continued to rise. Although there have been many fluctuations in the middle, it is still at a high price range. Yang Shibin, president of the China Knitting Industry Association and Mao Kailin, director of the China International Cotton Association, used the same set of data at relevant industry conferences: Since last August, global cotton and other fiber prices have increased by 100%, and yarn prices have increased by 45%. The price of fabrics rose by 12%, clothing prices rose by 1%, and the consumer price index for clothing dropped by 1%. It can be said that the downstream companies have been unable to tolerate the various costs, especially the price of raw materials, once and again exceed the threshold, and have begun to resist by suppressing demand. The continuous production characteristics of chemical fiber make the inventory of the industrial chain transfer to this point when the demand is reduced, making it more difficult for the company to make capital turnover.

There is also a voice that the high stocks that yarn companies have backlogged during the past year may have made the situation of demand that has not significantly shrunk significantly. The relevant person of Zhejiang Fulida Co., Ltd. told reporters about his doubts: According to market research, the current situation of people's cotton fabrics in Jiangsu and Zhejiang is very good. Many manufacturers' sales volume has even doubled compared to the same period of last year. How much worse? The lack of demand for cotton yarn directly leads to a decline in the demand for viscose fibers. This person analyzed that it may be a rare case of catching a rare case last year. Yarn manufacturers are producing at full capacity and stocks are too high. This part of the stock is being digested for a long time this year. However, he said that specific reasons must be further in-depth market research.

Some companies with the advantage of “slurry and fiber integration” told the reporter that although the current state of the company is in a micro-deficient state, the high-priced pulp purchased in March will be used up, and the use of raw materials after price reduction will improve the production situation. It is expected that the situation will improve in June. It will be able to realize low profit later. However, for companies with unclear raw material advantages, the predicament will continue until at the end of this year.

More than 80% of the enterprises in the entire industry have suffered losses, which is rare in the history of the viscose industry. With the widely recognized performance of viscose fiber, this situation will undoubtedly make the industry a bit embarrassing. Although the analysis of the reasons is relatively complicated, the leading role of commodity price declines, the increasingly prominent raw material supply gap, and the rapidly expanding capacity scale all contribute "into strength." In particular, the former leader of Shandong Hailong was reorganized, leaving the industry wondering: The era of big reshuffling in the viscose industry may be approaching.

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