Thursday 28 June 2012

Raw Materials Update from Lenzing

Geoff Collins, Head of Sales, Lenzing Asia (Hong Kong) described how Textiles, Cotton and China were the main factors responsible for the “crisis” affecting the price and availability of man-made cellulosic fibres for nonwovens.  Until the end of 2010 the Cotton A index and Chinese viscose price varied between $1.2 and $2.6/kg with viscose moving in unison with cotton and being roughly 25-50% more expensive.  In early 2011, Cotton A spiked to $5.3/kg due to poor Chinese and Pakistani cotton crops and the resulting increased demand for viscose pushed the viscose price to $4/kg.  Normality returned by August 2011 with both prices fluctuating around gently upward but converging trends line if the spikes were ignored.  By the end of 2011 cotton A and Chinese viscose were both around $2.2/kg.

Lenzing Sales Growth
Since 2000 cellulosics (including cotton) and synthetics had grown at similar rates to give a global per capita cellulosics usage of 4.7kg/year and 7.1kg for synthetics. Now population was above 7bn and growing at 80mn per year.  Furthermore the 11.8kg per capita total was an average with the developed world using above 25 kgs and the rapidly growing economies of China, India and Brazil using less than 8kg.  As wealth and hence the fibre consumption in these countries rose to reach Western levels, Lenzing were projecting the demand for cellulosics to almost double by 2030 and require an extra annual capacity of ~20million tonnes. Cotton production would be constrained by competition with food production and the inability to further increase yield per hectare.  So, man-made cellulosics would have to fill what Mr Collins now called the Sustainable Fibres Gap* and the construction of many more large viscose and lyocell plants could be justified.

*originally The Comfort Gap
see also

(from EDANA Middle East Symposium  - Dubai - 14th and 15th Feb 2012)

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