ADVANSA to react on continous hike of polyester raw material prices
ADVANSA is recognizing a continuous increase of raw material cost for its polyester fibre products against earlier expectations of a softer situation after the summer vacation and driving season. Raw material cost for polyester have increased since June by 25%.
This is triggering the company to take a step and move up its prices for polyester fibres in the range of 0.15 -0.25 Euro/kg in line with the increases of Western European Contract Prices (WECP) for paraxylene and glycol of the 3rd Q 2006.
Consumers of paraxylene and glycol as ADVANSA are hit by several force majeure situations at major producers in the region, which is limiting the available supply significantly. Petrochemical prices are further fired up by the critical political situation in the Middle East with regard to the conflict in Lebanon and uncertain situation in Iran, which has caused oil prices to stay on historical high levels.
According to Heinz Meierkord, Vice President Marketing & Sales of ADVANSA: "The situation for the purchase of raw materials has developed over the last weeks with continuous high volatility in a way that major parts of a polyester fibre portfolio are reaching levels of financial returns without any fixed cost contribution. A producer like ADVANSA has to react now. As much as we did protect our customers in the last 3 months from the full level of cost increases, which we have seen, it has reached a point that we have to pass on some of those increases down the value chain. Similar to situations like in 1995 the cost increases from crude oil need to reach final consumers now in order to keep a global industry healthy.''
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