Carpet wool prices benefiting from rising oil?

15 Jul '08

2 min read

The US$ rise in broad wool prices seen in the final months of last year has continued into 2008.

Tighter broad wool supplies have helped. Also to wool's advantage was the rise in the price of oil and feedstock prices for substitute carpet fibres. However weak downstream demand is keeping a lid on the upward price movements for all carpet face fibres and squeezing manufacturers' margins.

High oil prices are feeding into petroleum products, including the feedstocks for synthetic fibres.
US prices for nylon carpet filament have seen no change since last September, and with house construction in that country falling to a 17-year low in March there are no signs of any upturn.

Downstream manufacturers are in a difficult situation, with record oil prices inflating raw material costs and the housing market crash affecting demand for their products. Mohawk, the carpet and flooring

manufacturer, announced plans to permanently shut down its filament carpet yarn manufacturing plant in Dahlonega, Georgia, by June, laying off 366 workers employed at the facility. The yarn produced at the site was used by the company to produce wall-to-wall broadloom carpet.

Although price resistance is limiting the rise in carpet wool prices, prices for these wool types have performed better than prices for apparel wool in 2008.

Australian Wool Innovation Limited

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