Escalating Raw Materials' Costs spoil festive mood of global MMF producers

14 Dec '09

8 min read

Having been beaten up by many brunt of failing economy, companies worldwide are aspiring upcoming year 2010 to be a year with a lot of optimism and rescue from termite like recession. Fibre industry, whether manmade or natural, is but obvious no exception in this. Where several companies are found investing into the industry with high hopes, on other hand, some have revised strategies, sourcing, and strengthening products line. In each case, industry in its purview is busily engaged girding itself for times ahead.

In order to catch current movements in the synthetic fibre industry amidst approaching festive season, our team penetrated various corners of the globe and managed to reach the desk of industry experts and real time industry dealers, worldwide. Noting their views on current market traits and crisis' upshots on their businesses, as well as their expectations from next quarter in offing, was a world of information.

Mr Anshuman Gupta, Chief Marketing Officer, Lucky Spinning-Thailand, describes that fibre production capacity in viscose market of China has increased by 30% in 2008-09. This has further resulted in an unprecedented demand of Wood Pulp and Cotton Linter Pulp generating an imbalance of demand and supply for viscose pulp. Its prices have also gone up from a low of $550 to a high of $1200, and this in turn has pushed the prices of viscose fiber to the current level of $2.30 to $2.35. According to him, these prices are unlikely to come down being cost vulnerable.

Giving a view on cotton market, he also said that cotton fiber shortage in China has resulted into the high prices in local market, and a weak Dollar has also added fuel to it. High viscose fiber prices pushed spinners and fabric manufacturers to shift to cotton.

Mr Gupta opines that the Industry is still not free from the clutches. Unless demand in Europe and USA returns back to normal, the Industry will continue to suffer, and the scenario will be more predictable only after Christmas Sales are over. However he envisages second half of fiscal to be very good.

From Germany, Mr Uwe Berger, Managing Director, Multi-Fiber Handles Gmbh, forecasts that the PES-fiber producers in Europe are about to disappear completely. Important companies like Tergal-Fiber, La Seda Barcelona, Nurell, Monte-fibre have permanently stopped their production during the last years. Märkische Faser and Trevira - as the remaining real European 1-A-Grade fiber producers for fine counts - should currently be in a comfortable situation, but will depend on the development of their clients in the traditional textile industry (spinning weaving), which still count on fibers with EU-origin only. Growing non-woven industry could compensate the quantities lost in steadily declining traditional textile industry, but cheaper fibers with Asian origin already embark the biggest share of this industry.

Viewing the global situation, he said that China and India should further strengthen their position to be the no-1 producers of PES-fibers worldwide, also giving a hard time to countries like Taiwan, Korea etc. He shows concern, that once the anti-dumping duties against imports from China in the EU disappear European companies for regenerated and filling types should also be in big trouble.

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