Lyocell Market Expected to Reach $3,267.1 million by 2034

According to a new report published by Allied Market Research, titled, “Lyocell Market," The lyocell market size was valued at $575.31 million in 2010, and is estimated to reach $3,267.1 million by 2034, growing at a CAGR of 8.9% from 2025 to 2034.

Introduction

Lyocell is a regenerated cellulose fiber that is primarily derived from wood pulp, most commonly sourced from eucalyptus, beech, birch, or spruce trees. It is considered a semi-synthetic fiber, as the base material is natural, but the fiber undergoes chemical processing. Lyocell fiber is biodegradable, possesses a silky feel, is highly absorbent, and is known for its moisture-wicking capabilities. Due to these characteristics, it is used in a wide array of applications ranging from apparel to medical supplies, industrial products, and even home furnishings. The production of Lyocell utilizes a non-toxic solvent called N-Methylmorpholine N-oxide (NMMO), which is recycled at a rate exceeding 99%, minimizing environmental impact. The Lyocell Market Analysis highlights emerging trends, key growth drivers, and competitive dynamics in the global sustainable textiles sector. This analysis provides valuable insights for stakeholders seeking to capitalize on eco-friendly fiber innovations.

Lyocell has established itself as a key material in the fashion and textile industry due to its versatility, comfort, and sustainability. The Lyocell industry is witnessing rapid growth driven by rising demand for sustainable and biodegradable textiles. Manufacturers are increasingly adopting eco-friendly production processes to meet global environmental standards.Its silky texture, breathability, and moisture-wicking properties make it ideal for a wide range of everyday clothing, including T-shirts, blouses, dresses, trousers, jeans, and underwear. It is particularly valued in activewear and yoga apparel, where temperature regulation and sweat absorption are crucial for comfort. In the luxury fashion segment, Lyocell is frequently blended with high-end fibers such as silk and wool to enhance softness and durability, while maintaining an elegant drape and sheen.

Lyocell's premium softness, temperature-regulating qualities, and sustainable credentials make it an ideal material for a broad range of home textiles. In bedding applications, Lyocell is often used in bed sheets, pillowcases, and duvet covers because of its high breathability and smooth hand feel. These qualities help regulate body temperature and promote restful sleep. It also features blankets and comforters, which provide warmth without trapping excess heat, making it suitable for all seasons. In mattress ticking and protectors, Lyocell contributes to moisture management, enhancing hygiene and reducing bacteria buildup. The Lyocell market trends highlight a surge in demand driven by sustainable fashion and eco-friendly production methods. Innovations in fiber blending and rising adoption in activewear are shaping the market's future.

Segments Analysis

The lyocell market is segmented into application, end-use industry, sales channel, production process, price point, income group, and region. On the basis of application, the market is divided into apparel, home textiles, and technical textiles. On the basis of end-use industry, the lyocell market is categorized into automotive, medical, construction, and others. On the basis of sales channel, the market is classified into online and offline. On the basis of production process, the market is classified into spunbonded, melt-blown, and staple fibers. On the basis of price point, the market is bifurcated into premium, and economy. On the basis of income group the lyocell market is divided into high income, and low income. Based on region the market is divided into North America, Europe, Asia-Pacific, and LAMEA.

On the basis of application, the medical is the fastest growing segment in the market in 2024, representing the CAGR of 9.18% during the forecast period. The lyocell is gaining popularity in medical sector in the production of wound dressings and bandages. Its excellent moisture management properties allow for optimal wound healing conditions by maintaining a balanced moisture environment and preventing infection. Lyocell’s smooth fiber surface also reduces irritation to damaged or sensitive skin, making it suitable for chronic wound care and burn treatments. Additionally, it supports antimicrobial finishes, further enhancing its suitability in clinical environments. Lyocell is also utilized in the manufacture of surgical drapes, masks, and gowns. These products benefit from the fiber's strength and fluid-barrier capabilities, which are essential in maintaining sterile conditions during surgical procedures. The Lyocell market growth is accelerating due to rising demand for sustainable and biodegradable fibers. Innovations in textile manufacturing are further boosting Lyocell's global adoption across fashion and home textiles.

On the basis of sales channel, the online is the fastest growing segment in the market in 2024, representing the CAGR of 9.08% during the forecast period. Lyocell, a sustainable and biodegradable fiber derived from wood pulp, has seen a surge in adoption within the online retail space, particularly in the fashion and home textiles sectors. With the rising awareness around environmental sustainability and ethical sourcing, consumers are increasingly seeking eco-friendly alternatives, and e-commerce platforms have become a primary channel for offering such materials. Many online clothing brands have incorporated lyocell into their product lines, especially for items like shirts, dresses, trousers, and loungewear due to its breathable, soft, and moisture-wicking properties.

On the basis of the production process, the spunbonded is the fastest growing segment in the lyocell market in 2024, growing with the CAGR of 9.05% during the forecast period. The adaptation of lyocell in spunbonded processes typically involves modifications to the extrusion and web formation techniques. Lyocell fibers are not thermoplastic and cannot be melt-spun like synthetics; therefore, technologies such as dry-jet wet spinning or solvent spinning (using NMMO as a solvent) are employed to create continuous lyocell filaments that mimic the behavior of spunbonded filaments. These filaments are then laid down and hydroentangled or calender bonded to form strong, uniform nonwoven fabrics. The resulting material retains the key advantages of lyocell—such as high absorbency, softness, strength, and biodegradability—while offering the web uniformity and production efficiency typical of spunbonded processes.

On the basis of the price point, economy is the fastest growing segment in the lyocell market in 2024, growing with the CAGR of 8.94% during the forecast period. In the economy segment, lyocell is often blended with cost-effective fibers such as cotton, polyester, or viscose to balance affordability with performance. These blends allow manufacturers to retain many of lyocell's desirable qualities like moisture absorption, breathability, and smoothness—while reducing the overall cost of garments. Fast fashion and value-oriented retailers are adopting lyocell in their collections to meet consumer demand for greener materials. Companies like H&M, Uniqlo, and Zara have integrated lyocell into their basic product lines, especially in items like t-shirts, dresses, and undergarments, making sustainable fashion more accessible to lower-income demographics.

On the basis of income group, low income is the fastest growing segment in the market in 2024, representing the CAGR of 8.98% during the forecast period. In the low-income group, lyocell is increasingly being used in affordable blended fabrics. Manufacturers often mix lyocell with cotton or polyester to reduce costs while retaining many of lyocell’s comfort and sustainability benefits. This enables the production of cost-effective clothing such as t-shirts, innerwear, and casual wear sold through fast fashion and discount retail chains. Governments and NGOs in emerging economies are also promoting the use of sustainable textiles in local production, thereby indirectly encouraging the inclusion of lyocell in low-cost garments.

Regional Analysis

Based on region, Asia-Pacific was the fastest growing segment in the lyocell market in 2024 growing with the CAGR of 8.99% during the forecast period. Lyocell, a sustainable regenerated cellulose fiber derived primarily from wood pulp, has seen a growing presence across Asia-Pacific (APAC) countries due to its environmental benefits, softness, and versatility. China, the world’s largest textile producer, has significantly expanded lyocell production and consumption. Domestic manufacturers such as Sateri and Lenzing (through its joint ventures) have scaled up operations to meet growing demand from eco-conscious fashion brands. India, is the another major textile hub, has witnessed increasing use of lyocell in the garment industry, particularly for casualwear, loungewear, and eco-friendly fashion labels. Textile parks and government-backed sustainability initiatives, such as the Production Linked Incentive (PLI) scheme for textiles, have encouraged the use of environmentally friendly fibers

Competitive Analysis

The major prominent players operating in the lyocell market include Sateri, Yibin Grace Group Co.,Ltd, Hyosung Advanced Materials, Asia Pacific Rayon Limited, Tangshan Sanyou Xingda Chemical Fiber CO.,Ltd, Baoding swan Fiber Co., Ltd., Marchi and Fildi Group, Tintex Textiles, FORMOSA TAFFETA CO., LTD, Aditya Birla Yarn, Lenzing AG, AceGreen Eco-Material Technology Co., Ltd., and others. The Lyocell market share has been steadily increasing due to rising demand for sustainable and eco-friendly textiles. Key players are leveraging innovation and partnerships to expand their global footprint.

In January 2024, introduced a novel processing method for stretch‑capable TENCEL™ Lyocell, boosting recovery and comfort, ideal for sportswear and athleisure.