In this first extract from the recent release on the Lenzing 2012 financial year we have a useful update on the man-made cellulosics scene, with production up 9.2% against an all-fibres increase of 1.2%. Cotton stocks are high and prices are down 40% on 2011 so the outlook for 2013 is less rosy.
Lenzing estimate that the rise in world fiber production only amounted to 1.2% during the reporting year, with total volume up only slightly from 81.0 mn tons to 82.0 mn tons. This was in contrast to the 6.4% increase generated in 2011 and owing to the continued slow economic development. Worldwide production of man-made cellulose staple fibers, the core business of the Lenzing Group, climbed 9.2% in 2012 to 3.66 mn tons, thus expanding at a considerably faster rate than the global fiber market as a whole.
The fiber market in 2012 was dominated by a significant decrease in selling prices for all fibers. The average price of cotton, the benchmark for the entire fiber industry, fell more than 40% below the prior-year level. Cotton inventories further increased, and the global stock-to-use ratio reached a record level of more than 70%. Spot prices for viscose fibers were down by about 15% in China, the world’s largest fiber market.
Lenzing achieved a new sales record in 2012 against the backdrop of a very difficult market environment. The average fiber selling prices of the Lenzing Group fell by 12%, decreasing from EUR 2.22 per kilogram to EUR 1.96 per kilogram.
“The fiber market rewarded Lenzing for its high product and service quality as well as its close cooperation with and integration in the textile chain”, states Friedrich Weninger, Member of the Management Board and Chief Operating Officer. “In particular, our specialty fibers Lenzing Modal® and TENCEL® enabled us to successfully differentiate ourselves from standard products manufactured by Asian producers. In addition, we successfully attracted new customers and opened up new markets while launching new innovative fiber applications on the marketplace”, COO Weninger says.
Lenzing Modal® and TENCEL® achieved price premiums of 40% - 60% in 2012 compared to standard viscose fibers. Specialty fibers accounted for approximately 35% of fiber sales in 2012. However, in the course of the year, selling prices for Lenzing’s specialty fibers had to be continually adjusted downwards in line with general price levels as a result of the significant drop in cotton and viscose fiber prices.