Viscose fibres account for the major alternative use fordissolved pulp, with around 2 million ton of fiber produced per annum.Cellulose acetate is an industrially-important ester of cellulose and is usedin a wide range of products including cigarette filters, films and othercoating materials. It is also used in molded articles (e.g. spectacle frames),as a micro- and ultra-micro filtration membrane in the pharmaceuticals sector.


Viscose

% by Sector

Staple Fibres

44.7

Filaments

7.8

Tyre Cord

1.4

Cellophane

4.6

Lyocell

1.0

Cellulose Acetate


Cigarette Filters

16.0

Textile Filaments

6.2

Solid Materials

0.7

Cellulose Ether


Carboxymethyl-cellulose

3.2

Non-ionising Ether

8.2

Cellulose Nitrate

4.9

Microcrystalline Cellulose

2.0

 

Lyocell fibres are produced from Eucalyptus and pine pulp.Both Viscose and Lyocell fibres are being marketed as environmentally-friendlyalternatives to cotton and synthetic fiber production by Lenzing AG in Europe.


Capacity expansion of DissolvingWood Pulp Industry

 

Producer

Capacity Ton

Sappi (S A)

230,000

Bahia (Brazil)

250,000

Tembec(Canada)

200,000

Tiger forest & Paper

300,000


In the year of 2007, the prices of VSF surged drastically. The price of VSF 1.5D increased to RMB 22500/ton from thebottom of RMB 9000/ton in last year. In the Year 2008, Bothe the governmentsannounced the favorable macro-economic policies which are turn the marketsentiment positive and may compensate the decrease in the exports. Meanwhilenew capacities are going to push the production up, it is expected that in graduallyit will put the supply of VSF may be surplus in the short run. Overall, VSFmarket comes to a stage of an adjustment in Year 2008. Particularly in thesecond half of Year 2008, the expansions of international dissolving pulpcapacity will give an impact on cotton linter pulp and downstream markets.


As Viscose fibres and textiles areresemble to cotton and very useful in sports, we assume a strong hike in price these year due to Olympic Games. In near future we see slow down in investment and inplant construction of Dissolving grade pulp. Currently the supply of Cottonlinter pulp is enough and output is not been reached to a maximum level hencenew added capacity will definitely add competition among the current players.Currently most the viscose plants operator have their own transformed andintegrated process of their own raw material supply chain module. They will bealso affected due to extreme competition in up-stream market. Few producers who are heavily depending upon the imported wood pulp will turn to starvation of rawmaterials. Here numbers of up-coming plants are not concerned but theircapacities are attending more concerns. Large capacity will heavily impact onthe market fundamentals of demand supply.


 

Last but not the list is effect on environment. Governments all over the world are strengthening their low for environment protection. In this scenario it would be very tough for the any official body, to approve grant for wood pulp industries. Hence there is also possibility that giants will move for takeover and merger acquisition strategy to get superiority in market. This would even help them in cut throat competition.



Price Comparison of VSF, PSF and Cotton

 

 


Chinese VSF Demand Supply

 

 

Indian Demand Supply of Viscose Staple Fibre (Million Kg)



 

 

Chinese Production Capacity of VSF 10,000 ton

 

 

 

Indian Production Capacity of VSF (Million Kg)

 

 



Production of Viscose in China