The price of viscose staple fibre has declined by nearly 36 percent to 18,000 Yuan/ton from about 28,000 Yuan/ton six months ago.
The fall in price of cotton has led to a fall in price of viscose staple fibre or rayon, which acts as a substitute for cotton.
Another reason for the fall in price is the surplus capacity. A few years ago, much new capacity was built creating industry surplus. Currently, nearly half of the capacity is operational.
When the price of cotton saw a sharp rise last year, the price of rayon too increased from 16,000 Yuan/ton in January 2010 to 33,000 Yuan/ton, a record high since 1995. However, price fell to 24,000 Yuan/ton in February 2011.
Meanwhile, the price of polyester staple fibre has remained comparatively stable at 13,000 Yuan/ton since January 2011. There is less addition of new capacity in polyester staple fibre as the industry made losses a few years ago.
Also, the price of upstream PTA has declined by about 30 percent during the same period, bringing gross profit margin of polyester to previous level.
The price situation, however, may change in 2012.
Fibre2fashion News Desk - China
marketing@alchempro.com
