MMF players anticipate meliorative 2010
Sounds of Christmas bells and marching of Santa sleigh seems to have failed to cheer up the synthetic fibre industry that has been feeling asthmatic being strangulated by claws of financial catastrophe since a year and more. Ferreting about current scenario of this industry, we made through some chinwags consulting industry makers and specialists, across the poles.
Commencing with look-up, we requested views of Dr Prakash Maheshwari, President Director, Indo Bharat Rayon PT- Indonesia, who drawing closer picture on current global fibre industry said- “Reflecting the global economic downturn, world fibre production fell by 5% in 2008. Man-made fibre output was also down, by 4%, but the fall was cushioned by marginal growth in China. The decline in man-made fibres stemmed from decreases in synthetic fibres as well as cellulosic fibres, although the fall in synthetics was less marked.”
He further added- “Globally, VSF sales have been improving progressively since Oct' 09 and current sales levels have crossed earlier highest levels. However, the rising gap with polyester and cotton prices could limit viscose consumption in the near future. The viscose industry is also now confronted with a substantial increase in input costs, particularly, pulp. Cotton linter, pulp and viscose fibre prices keep upward trend entering 2009/10 season but the profits have started to decrease.”
He also describes that Polyester staple fibre industry was adversely affected by the global slowdown with crisis aggravating in the second half of the year 2008. During this year, only 158,000 tons of net capacity was added, Asia alone added 590,000 tons. In his view, other regions witnessed capacity de-rating, and in cotton sector, consumption did not come up to its pre-slowdown period.
“World Fibre Stocks are likely to fall as output is expected to be maintained while demand increases,” he connoted in displeasure.
Making note on peculiar market trend that the industry could witness in days to come, Mr Maheshwari, says –“Cotton is expected to see a sharp decline in global production this season, therefore industry may witness substitution by other fibres which would lead to some betterment in demand as well as prices of VSF / PSF. Polyester intermediate prices are rising in Asia under stronger raw material costs and higher demand from fiber producers. Prices in the whole polyester pipeline are increasing in line to recovery in textile industry.”
He elaborated that 1st half of 2008 witnessed general slowdown of economies in all geographies, as a result 2nd half of 2008 started witnessing reduction in consumer spending due to the recession and global financial crisis. This in turn caused sharp reduction in demand as well as prices. Textile sector was severely hit being a deferrable expenditure from consumer's view point. Countries like Brazil, Turkey initiated Anti Dumping investigations on yarn imported from India, Thailand, Indonesia, China etc. to protect domestic industries. This in turn, impacted domestic consumption in these countries for some time. Q1 witnessed a temporary resurgence in demand and prices in both domestic and export markets, mainly due to inventory in the entire value chain had dried up and marginal improvements in the macro economic conditions arising from the stimulus package announced by various countries.