Crude oil price rise to affect India's textile industry

(fibre2fashion) -- The rise in prices of crude oil in the past few days, especially after the Iran crisis, has made yarn and fabric producers in India's biggest man-made fibre (MMF) hub a worried lot.

The MMF industry in Surat heavily depends on crude oil products for manufacturing various yarns like polyester filament yarns, spun yarns and blended yarns, which are used to weave fabrics.

Mr. Arun Jariwala, Chairman, Federation of Indian Art Silk Weaving Industry (FIASWI), said, "The increase in crude oil prices will affect Surat Textile industry in a manner that will increase the prices of yarn."

"Last time, when the crude oil prices went up to USD 150 per barrel, yarn prices increased by 20-25 percent. This time, while there will be no affect on cotton yarn price, the price of synthetic yarn is likely to go up by 10 percent. Hence, the costs will rise very high," he adds.

However, the impact will be relatively less on yarn manufacturers. He opines, "The yarn manufacturers will still be able to bear the increase in price of raw materials as there are few such units and they are also in a position to export."

Comparing how yarn and fabric manufacturers have fared, he says, "In the last two years, yarn exports have increased and the sector has a positive growth. But, the fabric segment has a negative growth. This means, they have exported yarn in greater quantities and at a lesser price, and thus sustaining high fabric prices in India. So, it will be difficult for the weavers and processors, and the consumers will prefer wearing cotton fabrics, rather than synthetic fabrics."

To ease the situation, Mr. Jariwala recommends, "The Government will have to decrease the excise duty not only on yarn, but also on purified terephthalic acid (PTA) and Monoethylene glycol (MEG), so that cost of production is reduced and yarn is available at a reasonable price to weavers."

MRC

(plastemart) -- Saudi Petrochemical Company (Sadaf), has notified contract customers in India of a decision to reduce shipments by as much as half, of styrene monomer in March.

Sadaf typically ships around 10,000-12,000 mt/month of SM to India. The reason for the reduced supply is not clear, but sources said Sadaf has not declared a force majeure on product from its 1.2 mln tpa plant in Al-Jubail.

Owned jointly by Shell Chemicals Arabia LLC and Saudi Basic Industries Corporation (SABIC), Sadaf was established in 1980 and began operating in 1984. The company operates from one of the world's largest and most competitive petrochemical complexes in the Al Jubail industrial zone on Saudi Arabia's eastern coast. Sadaf's six world-scale manufacturing plants produce over 4.7 million tonnes of building-block petrochemicals a year, primarily sold to customers in Asia Pacific.

MRC

(plastemart) -- Chinese PP and PE buyers are expressing caution in their market outlooks for March.

Buyers complained that demand for their end products has not been as good as anticipated after the holidays. They do not expect any sudden improvement in demand in April. Most buyers are predicting that PE prices will be stable to firmer in March, saying that the large increases in initial March prices announced by some overseas producers will not prove workable and that sellers will ultimately concede to smaller price hikes in order to complete their March sales.


"Demand for our end products has been disappointing after the holidays and our stock levels are mounting," complained an agricultural film manufacturer in the North. "We are unwilling to purchase beyond our needs for now as we do not want to continue piling up stocks. We believe that the new month will not bring any major change in the demand outlook."

"Converters have raised their operating rates recently, but this increase in operations has yet to translate into orders for more raw materials," commented a China based trader. "We are actively exploring the possibilities of re-exporting some of our cargoes but are finding it difficult to conclude satisfactory re-export business because of the additional time and paperwork required to close re-export deals, "the trader commented. "We expect prices to move higher for March, but we feel that producers will need to accept smaller increases than their initial hike targets in order to complete their March business," the trader told.

MRC

(plastech) -- Borealis, a leading provider of chemical and innovative plastics solutions, recorded a net profit of EUR 507 million in 2011, compared to EUR 333 million in 2010.

The company delivered a return on capital employed (ROCE) of 13%, compared to 10% in 2010. Net debt increased by MEUR 84 by the end of December 2011 but the gearing improved to 35%, reflecting Borealis' strong financial position.

2011 was a year of high volatility with the economic climate improving in the first half of the year only to deteriorate in the second half, due in part to the unresolved sovereign debt crisis. This shift in market sentiment had a profound impact on the European polyolefins industry and resulted in significant margin erosion. As a result, the Polyolefins business segment recorded lower profits in 2011 compared to 2010. The Base Chemicals business segment was less impacted by the change in market sentiment, improving profits compared to 2010 driven by healthy margins and commercial excellence.

MRC

(plasticstoday) -- IKEA, the international furniture retailer giant, has developed plastic pallets to replace the traditional wooden pallets when shipping goods across its global operations.

The plastic shipping pallets, called the OptiLedge, weighs less than two pounds and are durable and 100% recyclable.An IKEA spokesperson told the OptiLedge are made from copolymer polypropylene, and feature many advantages over paper platforms.

"The OptiLedge is less susceptible to moisture, maintains stiffness with flexible loads and is more durable compared to paper pallets," the spokesperson said. "The injection molding process ensures much higher levels of product consistency." In addition, the OptiLedge may offer savings to other supply chains, as well, by decreasing the costs associated with labor, fuel, packaging and product damage, the spokesperson said.

Originally designed just for IKEA, the company decided to market the OptiLedge and make it available to other retailers and companies. For instance, Best Buy now uses the OptiLedge for products shipping from overseas to the retailer's stores in North America and around the world.

IKEA plans to phase out the use of wooden pallets across its global operations and to transition to lean alternative shipping platforms consisting of its OptiLedge plastic pallets and paper platforms.The IKEA spokesperson said the objectives of this change are to decrease cost and create a more sustainable business. Non-wooden handling materials, such as paper pallets and plastic loading ledges, are lightweight.

The IKEA spokesperson said the initiative to phase out wood pallets is an ongoing process. In North America, IKEA has already eliminated the use of wood pallets, but the spokesperson said there is still a lot of work left to do in Europe.

MRC