Polyester Staple Fiber: Nonwoven Fabric Price Rise in Real Earnest

Japanese polyester staple fiber (PSF) producers have begun to put in serious efforts to achieve higher prices for nonwoven fabric applications, the largest market for PSF.

Against a backdrop of soaring raw material and fuel prices, PSF producers have aggressively increased their prices for spinning

Nevertheless, the fact is that the price rise has been accepted by only about half of their customers. In response to this situation, each PSF producer expressed its intention to make a secondary price rise, effective October shipment. The range of the price increase is 20-30 yen, the same as in the spring this year. Even so, staple nonwoven fabric producers are racking their brains about how to respond by saying, "PSF producers have taken a stronger line than in the spring."

Price hikes are understandable for staple nonwoven fabric producers as well because higher raw material and fuel prices are burning problems common to both producers. Nevertheless, a shift of rising costs to product prices is also difficult in the case of nonwoven fabrics as well. There is little possibility that staple nonwoven fabric producers will fully agree to the first and second price-hikes.

In this situation, Toray Industries, Inc. has taken up a stance that even production cuts are inevitable and Toray is going to do its best to establish price increases. While implementing a thorough profit management by item, Toray has taken an aggressive attitude by saying "We are not going to sell unprofitable items."

According to the industry's estimate, the shipment volume for nonwoven applications from January to July 2004 remains virtually flat. By contrast, the shipment volume for fiberfill applications declined considerably and the supply-demand situation of PSF has eased in undertone. According to the Japan Chemical Fibers Association, PSF producers' stocks in August exceeded the 30,000 ton-level for the first time since February 2003. However, if low-priced stocks should appear on the market at the end of September to make adjustments in settling accounts, it will be difficult to raise prices in the fourth quarter. Consequently, there is a high possibility that not only Toray, but also the whole industry will enter into production reductions.