From the Sector

Reset
8 results
23.02.2024

Kelheim Fibres: Price increase for viscose fibres from 1 April 2024

Kelheim Fibres GmbH, a leading manufacturer of specialty viscose fibres, has announced to increase its prices by 12% to 15% for specialty viscose fibres starting April 1, 2024.

With the strong rebound in cotton fibre prices, there has been a sharp increase in the demand for viscose, especially in Asia. In the face of the rapid rise in interest rates, wages, chemicals, and environmental costs, accompanied by depressed fibre prices over the past years, Kelheim Fibres sees no other choice than to start improving margins back to sustainable levels by raising the base price.

Kelheim Fibres GmbH, a leading manufacturer of specialty viscose fibres, has announced to increase its prices by 12% to 15% for specialty viscose fibres starting April 1, 2024.

With the strong rebound in cotton fibre prices, there has been a sharp increase in the demand for viscose, especially in Asia. In the face of the rapid rise in interest rates, wages, chemicals, and environmental costs, accompanied by depressed fibre prices over the past years, Kelheim Fibres sees no other choice than to start improving margins back to sustainable levels by raising the base price.

Source:

Kelheim Fibres

16.08.2022

Suominen to implement surcharges in North America

Suominen announces general surcharges on all its products in North America effective immediately. These surcharges are a response to significant unexpected increases in raw materials, energy and freight costs.

“We have done all we can to mitigate these increases on behalf of our customers. Suominen can no longer absorb the full extent of these increases. We are living in an unusual time in the nonwovens industry with unprecedented and unexpected cost increases accompanied by volatility in demand patterns and supply chain disruptions. We understand circumstances are extremely challenging and we remain committed to serving our customers during this difficult period,” says Lynda A. Kelly, SVP, Americas.

Suominen announces general surcharges on all its products in North America effective immediately. These surcharges are a response to significant unexpected increases in raw materials, energy and freight costs.

“We have done all we can to mitigate these increases on behalf of our customers. Suominen can no longer absorb the full extent of these increases. We are living in an unusual time in the nonwovens industry with unprecedented and unexpected cost increases accompanied by volatility in demand patterns and supply chain disruptions. We understand circumstances are extremely challenging and we remain committed to serving our customers during this difficult period,” says Lynda A. Kelly, SVP, Americas.

Source:

Suominen

Photo: Pixabay
15.08.2022

Cotton prices outlook

Cotton Incorporated published its monthly economic letter of August and shared new insights of the cotton prices:

Cotton prices continue to be caught between the two competing storylines that have been in play for the past several months.
On one side, there is the deteriorating global macroeconomic situation.  The International Monetary Fund (IMF) lowered its projection for global economic growth in both 2022 (3.2%) and 2023 (2.9%) in the updates released in late July.  Current IMF forecasts are significantly beneath those from January (called for 4.4% growth in 2022 and 3.8% growth in 2023) and April (called for 3.6% growth in 2022 and 3.6% growth in 2023).  The evolution in the macroeconomy was a likely factor contributing to the shift in investors’ outlook on the commodity sector, which led to a collapse in prices for cotton and a range of other commodities in June and July.

Cotton Incorporated published its monthly economic letter of August and shared new insights of the cotton prices:

Cotton prices continue to be caught between the two competing storylines that have been in play for the past several months.
On one side, there is the deteriorating global macroeconomic situation.  The International Monetary Fund (IMF) lowered its projection for global economic growth in both 2022 (3.2%) and 2023 (2.9%) in the updates released in late July.  Current IMF forecasts are significantly beneath those from January (called for 4.4% growth in 2022 and 3.8% growth in 2023) and April (called for 3.6% growth in 2022 and 3.6% growth in 2023).  The evolution in the macroeconomy was a likely factor contributing to the shift in investors’ outlook on the commodity sector, which led to a collapse in prices for cotton and a range of other commodities in June and July.

Beyond the weakening macroeconomic environment, there also may be factors associated with cotton supply chains that could affect demand during the 2022/23 crop year.  Downstream consumer markets for cotton can be viewed as more discretionary than other spending categories, such as food, energy, and lodging, that experienced some of the sharpest effects of inflation.  Given price increases for necessities, consumers may have less income to devote to apparel and home furnishings.

In the U.S., consumer spending on clothing has been flat for the past year.  However, it has been holding at levels that are 25% higher than they were in 2019.  If U.S. consumers pull back on clothing purchases, it may hit the market just as retailers have caught up with consumer demand after the onset of the shipping crisis.  In weight volume, the cotton contained in U.S. apparel imports was up 22% year-over-year in the first half of 2022.  Relative to 2019 (pre-COVID and pre-shipping crisis), the volume in the first half of 2022 was up 23%.  Given strong import volumes, if there is a dip in consumer demand, inventory could build both at retail and upstream in supply chains.  This could lead to cancelations, potentially all the way back to the fiber level, where contracts signed at prices higher than current values could be particularly susceptible.

Tight U.S. supply is on the other side of price direction arguments.  Cotton is drought tolerant, and that is why it can be viably grown in perennially dry locations like West Texas.  However, cotton requires some moisture to germinate and generate healthy yields.  West Texas has had very little rain over the past year, and drought conditions have been extreme.  As a result, abandonment is forecast to be widespread.  It remains to be seen exactly how small the U.S. crop will be, but the current USDA forecast predicts only 12.6 million bales in 2022/23 (-5.0 million fewer bales than in 2021/22).

Meanwhile, demand for U.S. cotton has been relatively consistent, near 18 million bales over the past five crop years (an average of 15.5 million bales of exports and 2.7 million bales of domestic mill-use).  A harvest of only 12.6 million falls well short of the recent average for exports alone, and U.S. stocks were near multi-decade lows coming into 2022/23.  All these statistics suggest shipments from the world’s largest exporter may have to be rationed in 2022/23.  If cotton is not readily available from other sources, the scarcity of supply from the U.S. could support prices globally.

Simultaneously, there is weakness from the demand side.  The market has struggled to find the balance between the weakened demand environment and limited exportable supply in recent months.  The conflict between these two influences makes it difficult to discern a clear direction for prices and suggests continued volatility.

More information:
Cotton Inc. cotton
Source:

Cotton Inc.

04.08.2022

SGL Carbon: Positive performance in the first half of 2022

  • Sales increase of 10.7% to €549.8 million in the first half of 2022
  • EBITDApre improves by 22.6%, higher than the increase in sales, to €87.9 million
  • Positive business development, price increases and strict cost management led to forecast increase on June 7, 2022

Despite uncertain general conditions in the first six months 2022, SGL Carbon's business model is proving its resilience. After €270.9 million in Q1 2022, SGL Carbon was able to increase sales to €278.9 million in Q2. Accordingly, sales for the first half of 2022 amount to €549.8 million, which corresponds to a sales plus of €53.1 million or 10.7% compared to the same period of the previous year.

The increase in sales was driven in particular by customers in the semiconductor industry and growth in the industrial applications market segment. Demand from the automotive and chemical industries was also encouraging.

  • Sales increase of 10.7% to €549.8 million in the first half of 2022
  • EBITDApre improves by 22.6%, higher than the increase in sales, to €87.9 million
  • Positive business development, price increases and strict cost management led to forecast increase on June 7, 2022

Despite uncertain general conditions in the first six months 2022, SGL Carbon's business model is proving its resilience. After €270.9 million in Q1 2022, SGL Carbon was able to increase sales to €278.9 million in Q2. Accordingly, sales for the first half of 2022 amount to €549.8 million, which corresponds to a sales plus of €53.1 million or 10.7% compared to the same period of the previous year.

The increase in sales was driven in particular by customers in the semiconductor industry and growth in the industrial applications market segment. Demand from the automotive and chemical industries was also encouraging.

EBITDApre, as one of the Group's key performance indicators, improved by €16.2 million (+22.6%) to €87.9 million (H1 2021: €71.7 million). Consequently, the EBITDApre margin increased from 14.4% to 16.0%. In addition to the higher utilization of production capacities due to higher sales, the improvement in earnings was also driven by the largely successful passing-on of higher raw material and energy costs to customers as well as savings from the transformation program.

EBITDApre does not include positive one-off effects and non-recurring items totaling €10.6 million (H1 2021: minus €5.2 million). As a result, EBIT in H1 2022 increased significantly from €38.3 million to €69.6 million. Taking into account the financial result of minus €16.6 million (H1 2021: minus €14.0 million), consolidated net income for the first six months of the current fiscal year amounted to €48.8 million, compared to €17.9 million in the prior-year period.

Business Units
With an increase in sales of €22.2 million (+10.0%) to €243.4 million, the Graphite Solutions (GS) business unit made a major contribution to SGL Carbon’s sales growth. In particular, continued high demand from customers in the semiconductor sector, which represents approximately one third of the segment's sales, led to the positive business development in GS. As a result of the predominantly high-margin business, EBITDApre at GS improved by 22.7% to €54.0 million.

The Process Technology (PT) business unit benefited from the good order situation in the chemical industry in H1 2022 and consequently increased sales to €49.2 million (H1 2021: € 40.8 million). EBITDApre also improved from €0.1 million in the prior year’s first half to €4.1 million in H1 2022.

The Carbon Fibers (CF) business unit benefited in the 1st half 2022 from final deliveries to a major automotive manufacturer whose contract expired as scheduled on June 30, 2022. Segment sales increased by 5.8% year-on-year to €176.0 million. In contrast, EBITDApre at CF decreased by €4.2 million to €28.2 million despite the good order situation and successful price increases. It should be noted that CF was impacted by a special effect from energy derivatives for price hedging in the amount of €9.2 million in the first quarter of 2022.

With an increase in sales of 15.6% to €69.6 million, the Composite Solutions (CS) business unit continued its upward trend. The specialist for customized component solutions for the automotive industry improved its EBITDApre from €5.7 million in the first half of 2021 to the current €9.7 million, based in particular on price and volume effects.

Balance sheet figures
Working capital rose by 11.7% to €381.1 million as of June 30, 2022. This was mainly due to higher inventories (€ +73.9 million) and an offsetting increase in trade payables (€ +29.0 million). A targeted build-up of inventories in critical raw materials due to disruptions in transport routes and the recent Covid lockdown in Shanghai were some of the reasons for the higher inventory levels.

SGL Carbon's net financial debt slightly increased by €6.6 million to €212.9 million as of June 30, 2022 (Dec. 31, 2021: €206.3 million), which was due to a lower free cash flow of €7.5 million for H1 2022 (H1 2021: €56.6 million).

Guidance increase
On June 7, 2022, SGL Carbon raised its sales and earnings guidance for fiscal year 2022. The company now expects sales of €1.1 billion (previously: around €1.0 billion) and EBITDApre of €130 - 150 million (previously: €110 - 130 million). Based on the pleasing business development, realized price increases, a stringent cost management, and taking into account the currently known risks, SGL’s management expects to achieve the earnings forecast for 2022 at the upper end of the stated range.

Source:

SGL Carbon

Photo: SGL Carbon
05.05.2022

SGL Carbon: Dynamic business development in Q1 2022 continued

  • Low impact of Ukraine war on business performance in 1st quarter
  • 12.2% increase in sales to €270.9 million based on growth in all four business units
  • Adjusted EBITDA improves by 11.5% to €36.8 million

SGL Carbon generated consolidated sales of €270.9 million in Q1 2022 (Q1 2021: €241.5 million). This corresponds to an increase of €29.4 million or 12.2% compared to the same period of the prior year. All four business units contributed to the pleasing increase in sales. In parallel, adjusted EBITDA improved by 11.5% to €36.8 million in the reporting period.

  • Low impact of Ukraine war on business performance in 1st quarter
  • 12.2% increase in sales to €270.9 million based on growth in all four business units
  • Adjusted EBITDA improves by 11.5% to €36.8 million

SGL Carbon generated consolidated sales of €270.9 million in Q1 2022 (Q1 2021: €241.5 million). This corresponds to an increase of €29.4 million or 12.2% compared to the same period of the prior year. All four business units contributed to the pleasing increase in sales. In parallel, adjusted EBITDA improved by 11.5% to €36.8 million in the reporting period.

Sales development
In the first three months of fiscal 2022, the sales increase of €29.4 million was driven by all four operating business units: Graphite Solutions (+€11.3 million), Carbon Fibers (+€6.6 million), Composite Solutions (+€7.2 million) and Process Technology (+€6.0 million).
In particular, sales to customers in the automotive and semiconductor industries and a significant recovery in the industrial applications segment were key factors in the increase in sales. Sales of the Process Technology business unit to customers in the chemical industry also developed pleasingly. The effects of the war in Ukraine, which has been ongoing since the end of February 2022, had only a little impact on SGL Carbon's sales performance in the 1st quarter.

Earnings development
Despite the increasingly difficult market environment in the course of Q1 2022, associated with temporary supply and production bottlenecks at their customers, temporarily interrupted transport routes, and significantly higher energy prices, SGL Carbon was able to keep the adjusted EBITDA margin almost stable year-on-year at 13.6%.  
Adjusted EBITDA increased by 11.5% to €36.8 million in the reporting period. Higher capacity utilization in the business units and product mix effects contributed to the improvement in earnings, together with the cost savings achieved as a result of the transformation. By contrast, higher raw material, energy and logistics costs as of end of February 2022 had a negative impact on earnings. The Carbon Fibers business unit was particularly affected by the energy price increases. One-time expenses of €9.2 million in conjunction with energy transactions burdened the Carbon Fibers business unit in the 1st quarter of 2022.  
To secure our production and delivery capabilities, around 85% of the energy requirements of the entire SGL Carbon for 2022 are price-hedged.
Adjusted EBITDA and EBIT do not include in total positive one-time effects and special items of €8.5 million, among other things from the termination of a heritable building right to a site no longer in use. Taking into account the one-time effects and special items presented as well as depreciation and amortization of €14.1 million, reported EBIT increased by 83.5% to €31.2 million (Q1 2021: €17.0 million). The net profit for the period developed correspondingly and more than tripled from €6.1 million to €21.4 million in a quarter-on-quarter comparison.

Outlook
The sales and earnings figures for the 1st quarter 2022 confirm the stable demand from different market segments. Price increases and volatility in the availability of raw materials, transportation services and energy were largely offset by savings from the transformation program and pricing initiatives at the customers.
For 2022, SGL Carbon continues to expect volatile raw material and energy prices, which were included in their forecast for 2022 at the time of planning. However, there are uncertainties about the extent and duration to which SGL Carbon and the customers will be affected by the impact of the war in Ukraine or temporary supply chain disruptions due to the lockdowns in China. Therefore, SGL Carbon's outlook for fiscal 2022 does not include supply and/or production interruptions at customers or the impact of a possible energy embargo that cannot be estimated at this time.  
SGL Carbon's forecast also implies that factor cost increases can be at least partially passed on to the customers through pricing initiatives. SGL Carbon has also included the revenue and earnings impact from the expiry of a supply contract with a major automobile manufacturer at the end of June 2022 in our forecast.

Source:

SGL Carbon

20.12.2021

Kelheim Fibres: Severe Impact of Natural Gas Price Increases

Over the past 14 days, the wholesale cost of natural gas in Germany has risen by more than 50%. This increase presents an extraordinary challenge for industry, and there is no sign of support or intervention from the Government. Indeed, recent statements are destined to provoke a worsening of the situation.

Kelheim Fibres is entirely dependent on natural gas for the generation of electrical energy and steam and has no viable short-term alternatives. In addition, the raw materials used by the company often consume high levels of energy in their production and are also increasing significantly in cost. These increases in cost jeopardise the future of the business if they cannot be passed on though the supply chain.

Kelheim Fibres is calling on the Government of Germany to take immediate steps to mitigate the impact of the cost increases for natural gas and is committed to work to implement alternative sources of energy in the medium term.

Over the past 14 days, the wholesale cost of natural gas in Germany has risen by more than 50%. This increase presents an extraordinary challenge for industry, and there is no sign of support or intervention from the Government. Indeed, recent statements are destined to provoke a worsening of the situation.

Kelheim Fibres is entirely dependent on natural gas for the generation of electrical energy and steam and has no viable short-term alternatives. In addition, the raw materials used by the company often consume high levels of energy in their production and are also increasing significantly in cost. These increases in cost jeopardise the future of the business if they cannot be passed on though the supply chain.

Kelheim Fibres is calling on the Government of Germany to take immediate steps to mitigate the impact of the cost increases for natural gas and is committed to work to implement alternative sources of energy in the medium term.

In parallel, the disruption to global logistic networks that has been seen throughout 2021 is now expected to continue throughout 2022. Massive increases in shipping rates – in some cases in excess of 80% – are being imposed without notice and with no opportunity for negotiation. These costs must also be passed on though the supply chain if businesses are to remain viable.

To address these issues, Kelheim Fibres is implementing the following measures with immediate effect:

  • The increased cost of energy and freight will be passed on in prices to customers at the soonest opportunity;
  • If necessary, changes or adjustments to existing agreements will be negotiated to reflect the increased cost levels;
  • If the necessary increase in fibre prices cannot be secured, cuts to production will be implemented with the objective of minimising losses until the cost increases can be mitigated.

As the drivers for the increases in natural gas prices appear to be temporary in nature, we will maintain any price adjustments under review and pass on any relief to customers.

Craig Barker, CEO of Kelheim Fibres, describes the current situation as critical. “The cost increases we are facing are unprecedented and call for swift and decisive action. We are determined to take the necessary steps to preserve the future of our business and provide security of supply for our customers. At the same time, we are relying on the support of our customers to help us conquer the challenges our business is facing.”

Source:

Kelheim Fibres GmbH

08.10.2021

Price increase for MERACRYL™ MMA (methyl methacrylate) and other methacrylate monomer products

Due to soaring natural gas and ammonia prices, Röhm GmbH announces a price increase for MERACRYL™ MMA (methyl methacrylate) and other methacrylate monomer products in Europe with immediate effect.

As agreements allow, the increase is:

MERACRYL™ MMA: 130 EUR/mt
MERACRYL™ GMAA: 130 EUR/mt
MERACRYL™ n-BMA: 95 EUR/mt
MERACRYL™ i-BMA: 95 EUR/mt
MERACRYL™ HEMA 98: 110 EUR/mt
MERACRYL™ HPMA 98: 110 EUR/mt

Due to soaring natural gas and ammonia prices, Röhm GmbH announces a price increase for MERACRYL™ MMA (methyl methacrylate) and other methacrylate monomer products in Europe with immediate effect.

As agreements allow, the increase is:

MERACRYL™ MMA: 130 EUR/mt
MERACRYL™ GMAA: 130 EUR/mt
MERACRYL™ n-BMA: 95 EUR/mt
MERACRYL™ i-BMA: 95 EUR/mt
MERACRYL™ HEMA 98: 110 EUR/mt
MERACRYL™ HPMA 98: 110 EUR/mt

Source:

Röhm GmbH

08.09.2021

Indorama Mobility Group: General price increase effective October 1st 2021

The Indorama Mobility Group, a manufacturer of industrial fibers, cords and fabrics, - like other companies - is confronted with significant inflation since the beginning of the year. The global economy has gradually recovered in 2021 from the impact of the COVID-19 pandemic, but is still experiencing very volatile market conditions: The global freight remains unreliable and expensive, cost for energy and global commodities is increasing, and the increasing focus on sustainability and environmental impact is driving compliance cost upward in most part of the world.

In detail:

The Indorama Mobility Group, a manufacturer of industrial fibers, cords and fabrics, - like other companies - is confronted with significant inflation since the beginning of the year. The global economy has gradually recovered in 2021 from the impact of the COVID-19 pandemic, but is still experiencing very volatile market conditions: The global freight remains unreliable and expensive, cost for energy and global commodities is increasing, and the increasing focus on sustainability and environmental impact is driving compliance cost upward in most part of the world.

In detail:

  • Utilities: gas price has tripled in the past few months in Europe (from a level of 15 EUR/MWh in Q4’20 to 45 EUR/MWh recently), while increasing by 50% in USA
  • CO2 emissions and compliance cost: prices for CO2 certificates in Europe have almost doubled, approaching 60 EUR/ton from 30 EUR/ton at the end of last year, while regulations continue to expand the need for CO2 compensation
  • Chemicals and additives (spinfinish, dip chemicals, coating & laminating chemicals): cost have increased by 5%
  • Packaging: prices for standard packaging materials have increased by more than 30%
  • Logistic: despite our local manufacturing footprint which is not fully affected by global freight issues, the regional logistic costs are also increasing up to 20% (road transport)

Despite constant efforts to optimise the cost structure through comprehensive initiatives to improve operations, cost increases have now reached a level, the group said, that can no longer be offset and must be passed on to the market. This is a necessary step to be able to continue supplying high-quality products and services of the broad product portfolio, it said.

More information:
Indorama Mobility Group
Source:

Indorama Mobility Group