The Profitability of Rayon Fabric Mills Remained Bleak, with Conventional Products Operating Near The Cost Line

In 2024, the profitability of rayon fabric mills remained bleak, with conventional products operating near the cost line. Since March 2024, the textile market has lacked the "Golden March and Silver April" atmosphere due to orders that fell short of expectations, and the balance between supply and demand for conventional products gradually deteriorated, with unsatisfactory profit margins. The pressure on the weaving mills has not eased in the second half of the year, with no significant improvement in profitability for their main products, essentially maintaining break-even or marginal profit levels.

In 2025, the production of rayon grey fabric is likely to increase, but the growth rate will be slightly lower than previous years. However, due to the significant acceleration in industrial upgrading in recent years, weaving efficiency has significantly improved, leading to continued supply pressure. Additionally, with the Federal Reserve planning multiple rate cuts, geopolitical risks and concerns about economic recession will likely resurface in the second half of next year, pressuring the grey fabric market and potentially making it less favorable than the first half.