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  • Demand for fibres: adjusting to

    different priorities it is not just

    about volume

    IWTO 2016 Congress, Sydney

    April 4 2016

    Bruna Angel

    Fibres Consultant, PCI Wood Mackenzie

    Trusted commercial intelligencewww.woodmac.com

  • Trusted commercial intelligencewww.woodmac.com

    2

    Agenda

    Textile fibre volumes: current situation and outlook.

    The success of filament and of polyester fibres over the last 20 years.

    Global drivers of demand for fibre and their interaction with megatrends.

    Economic growth and population.

    Technical innovation as a driver of fibre demand.

    Sustainability: a challenge for all fibres. How is the manmade fibre sector

    tackling this challenge?

    MMF= Manmade fibres

    PET= Polyester / Polyethylene Terephthalate

    PSF= Polyester staple fibre

  • Trusted commercial intelligencewww.woodmac.com

    3

    Polyester continues to dominate textile fibre consumption

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    1980 1985 1990 1995 2000 2005 2010 2015 2020

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    Polyester F+S Cotton Cellulosic F+S Nylon F+S Polypropylene F+S Acrylic Wool

    World Fibre Mill Consumption

  • Trusted commercial intelligencewww.woodmac.com

    4

    0

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    Cotton Polyester S Cellulosic S Acrylic S

    Wool Polypropylene S Nylon S MMF filament

    MMF filament growing faster than staple fibres

    World Fibre Mill Consumption

  • Trusted commercial intelligencewww.woodmac.com

    5

    Key PSF market segments (ktes) 2015

    Market segment % share

    Hygiene / wipes 15%

    Fillings / waddings 27%

    Technical 2%

    Carpets 4%

    Home furnishings 16%

    Auto 2%

    Activewear 3%

    Apparel 33%

    Volume total ktes 15868

  • Trusted commercial intelligencewww.woodmac.com

    6

    The political aspect: Chinas 5-Year Plan objectives for

    chemical fibre production

    6

    12th Plan 2010 2015 achieved +9.2% CAGR

    13th Plan 2016 2020 targets +3.4-3.6% CAGR Reduce investment. Raise operating rates.

    Will China be able to balance high company debt, non performing loans, slower

    domestic growth and a competitive external environment with employment objectives.

    Will the government allow bankruptcies among large petrochemical and fibre

    enterprises?

  • Trusted commercial intelligencewww.woodmac.com

    7

    The vast majority of MMF production growth has been in China

    World MMF Production by Region

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    Americas EE/WE/T AME/Aus S Asia India China/HK JKT

  • Trusted commercial intelligencewww.woodmac.com

    8

    Global excess capacity at polyester filament + staple

    60%

    70%

    80%

    90%

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    Capacity Production Operating Rate (%) (RHS)

  • Trusted commercial intelligencewww.woodmac.com

    9

    price competitive widely available, highly efficient process, high speed production and processing.

    few barriers to technology and raw materials widely available. highly flexible dyeing (fabric, package, spin, batch), denier (microfibers are exceedingly soft,

    islands in the sea can create suede like fabrics).

    many variants (lustre, cross section, dpf, decitex). easy care (cool wash/line dry/crease free) and wrinkle resistant resistant to stretching and shrinking , resistant to most chemicals and to mildew. abrasion resistant and strong. blends easily with natural fibres. cotton/poly, wool/poly, viscose/poly. Home textiles & Apparel. bicomponent fibres for filling warm, light weight, easy care, pillows. Home textiles & Apparel. tyrecord strong long lasting. Industrial. auto upholstery, headliners, hoses, belts. carpet staple and filament. fine filtration applications - non wovens, industrial the best sustainability story of all synthetic fibres recycling of PET bottles and increasingly

    recycling of polyester post consumer textiles and apparel

    Polyester properties recipe for success

  • Trusted commercial intelligencewww.woodmac.com

    10

    Very broadly speaking, cross sections are used as follows:

    Trilobal, octolobal, tape, diabolo (ie different solid shapes) alter the lustre (and to a lesser degree handle) of the fabric.

    Hollow cross sections are used to regulate thermal properties (often to store heat).

    Certain cross sections are used in bicomponent yarns to alter the differential shrinkage of the two polymer components and so achieve

    properties like stretch, different colour values, etc.

    A channelled surface (eg Coolmax, Gcool) is generally about moisture transportation, wicking, etc.

    Applications for different fibre cross sections

  • Trusted commercial intelligencewww.woodmac.com

    11

    China cotton and polyester staple prices

    Fibre price comparisons should include losses to yarn stage

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    Price

    ra

    tio

    US

    c/k

    g

    CCI Type 3128B China PSF 1.4/1.5x38mm den China cotton/PSF price ratio (RHS)

    Source: PCI Wood Mackenzie, Cotton

    Outlook

  • Trusted commercial intelligencewww.woodmac.com

    12

    Global variables and mega trends: a feedback loop that is

    always changing

    Global macro drivers of fibre

    demand

    Some mega trends

    Economy Living standards: volume and

    qualityGDP growth Food

    Per capita incomes Water

    Population dynamics Housing

    Absolute numbers/growth Health

    Age distribution

    Government policy Freedom of movement

    Industrial policy MigrationDevelopment policy Mega-cities

    Currency AgeingTrade

    Technology Sustainability

  • Trusted commercial intelligencewww.woodmac.com

    13

    Global economic growth is projected to slow

    -15

    -10

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    0

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    1990 1995 2000 2005 2010 2015 2020

    World Major Advanced Economies

    Emerging & Developing Asia CIS

    Latin America M. East & N Africa

    Sub-Saharan Africa

    GDP growth, annual % change, constant prices

    Source: IMF WEO October 2015

  • Trusted commercial intelligencewww.woodmac.com

    14

    Per capita incomes still rising

    Per capita GDP based on PPP (Purchasing Power Parity), current international dollar

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    40000

    50000

    60000

    MajorAdvancedEconomies

    Emerging &Developing

    Asia

    CIS Latin America M. East & NAfrica

    Sub-SaharanAfrica

    1990 2000 2010 2020

    Source: IMF WEO October 2015

  • Trusted commercial intelligencewww.woodmac.com

    15

    Per capita fibre demand: are high income regions saturated?

    Are there real opportunities in low income regions?

    0

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    kg/c

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    Wool Cotton MMF

    Final Demand by Region, kg per Capita - 2015

  • Trusted commercial intelligencewww.woodmac.com

    16

    Incremental growth in fibre consumption and in population

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    Wool Cotton MMF Population (RHS)

    Source: PCI Wood Mackenzie, US

    Census Bureau

  • Trusted commercial intelligencewww.woodmac.com

    17

    Effect of ageing on fibre consumption

    UK research UK Office for National Statistics: Age group 50 60 yrs

    spends 7% less per capita and age group 60+ yrs spends 19% less per

    capita than previous age group.

    US womens total apparel spending by age group and store, 2013, US BLS

    +3.4% CAGR -0.3% CAGR -2.5% CAGR

  • Trusted commercial intelligencewww.woodmac.com

    18

    Japanese population profile

    18

    Japan Population Profile 2000 - 2030) Japan Population above / below 50 yrs

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  • Trusted commercial intelligencewww.woodmac.com

    19

    Chinese population profile

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