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Chemical fiber manufacturers cut production to offset losses
02
Jul '08
Rise in oil prices has had a direct effect on polyester raw material PTA, for which prices have, quite evidently, scaled up as well. However, demand from the down stream sectors have remained weak making it difficult for manufacturers to pass on their burden to these enterprises.

In situations as complex as these, more production leads to more losses and the only alternative would be to cut down on outputs. This is exactly what polyester manufacturers in Taiwan are doing.

According to International PTA producer, Mitsubishi Chemical, contract price for July has reached US $1,380 per ton, up by $200 per ton. Based on these estimates, price of raw fiber could very well increase by a minimum of 7-9 Taiwan yuan.

Polyester industry has observed that the cost of production is mounting continuously and to top it up, electricity price for June has already been charged on summer rates and for July, the prices are expected go further high by 10 percent.

It is very important that polyester products incorporate these hikes but unfortunately, June offers gained by a mere 2-3 yuan per kilogram. On the other hand, because of price surge in essential raw materials, prices of raw and manufactured fibre are bound to increase in the future.

As of now, domestic chemical fiber manufacturers in Taiwan have resorted to large scale annual maintenance and production cuts for mitigating losses but this would only be a temporary solution.

Fibre2fashion News Desk - China


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