CEH Report

Table of Contents

Abstract

Since 2006 the global acrylic and modacrylic fiber market has continued its downswing, with some further acceleration during the two economic crisis years. In 2007 the price of acrylonitrile reached very high levels, pushing up the price of acrylic fibers as well. This further weakened the competitiveness of acrylic fibers with respect to other fibers, especially polyester. In 2008 the consumption of acrylic fibers decreased globally, including in those regions, like China, where it used to grow well. In the same year global consumption decreased by about 2.5% compared with 2007. High prices and declining demand have deteriorated the profitability of this industry and led producers to reduce utilization rates or capacity throughout the world, with most of the reductions occurring in Europe. In 2009, raw material costs started to decrease and global demand rebounded by about 3%. The recovery started in China and the Far East during the first quarter of the year and reached Europe during the second quarter. This positive trend has continued through the first few months of 2010.

The following pie chart shows world consumption of acrylic and modacrylic fibers:

Consumption of acrylic fibers is also concentrated in Asia, which accounts for 58% of the global demand, more than ten times that of Western Europe and the United States combined. This strong demand has been at least in part supported by the local textile mills for the manufacturing of apparel, the large majority of which is exported throughout the world. The major reason for escalating domestic production and consumption of acrylic fibers in Asia has been the rising demand for and consumption of low-cost Asian-made garments throughout the world.

The Africa/Middle East region is also an important consumer, accounting for about 25% of the total global demand for acrylic fibers. During the last few years, in particular, there has been an increasing shift of consumption from Western Europe to Turkey and the Middle East, where the fiber is converted into fabric and apparel for export back to Western Europe.

Future growth in the global acrylic fiber market will very much depend on the further development of acrylonitrile prices, and on its ability to gain competitiveness against polyester fibers. Low production costs are in fact the key factor for expansion during periods of sluggish worldwide demand. On the other hand, the capacity rationalization that has occurred during the last couple of years seems to have initiated a readjustment of the supply/demand balance, thus improving the industry's profitability. Moreover, major manufacturers are putting the accent on yarn innovations (antimicrobial, weather resistance, flame retardancy, gel dyeing, no-pill, etc.) in order to create new niches in a mature market. For the years 2009-2015, the consumption of acrylic fibers worldwide is expected to grow at an average annual rate of 3.5–4%.