China’s cotton stockpile means market uncertainty, says Lenzing
Austrian fibre producer Lenzing achieved record volumes of 235,000 tonnes in the first quarter of this year - a rise of 9% from the prior-year quarter.
All its production facilities were at full capacity and it reported “very good” sales volumes for specialty fibre Modal.
However, average fibre selling prices of EUR 1.56 per kilogram in the first quarter was 12% lower than the comparable level in Q1 2013, leading to a decline in the value of sales of 9%.
“The historically high cotton inventories in China and the unclear Chinese cotton policy have led to considerable uncertainties on the fibre market,” said the company in a statement. “For these reasons, a reduction and thus further weakening of global viscose fibre selling prices is anticipated. It is likely to take several quarters until the existing surplus production capacities for viscose fibres are reduced by growing volume demand.”
“Market headwinds remain strong, but we are making every effort to vigorously stand up against these unfavourable conditions with a broad range of countermeasures,” said CEO Peter Untersperger.
The first fibres from Lenzing’s new Tencel plant will leave the production lines around the middle of 2014, as planned.
