Indonesia’s textile exports grow by small percentage – Indonesia textile exports

Indonesia textile exports Indonesia textile exports Indonesia textile exports Indonesia textile exports Indonesia textile exports 

Indonesia’s textile exports grow by small percentage

Indonesia textile exports

A small 0.62 per cent year-on-year (y/y) growth has been observed in Indonesia’s textile exports in the first half of 2017. This has been supported by a 20.4 per cent (y/y) rise in knitwear exports. This modest growth being seen as a positive matter amid bleak global economic conditions which have led many countries to reduce imports of textiles.

According to Indonesian media reports, Ade Sudrajat, chairman of the Indonesian Textile Association (API), said Indonesia’s downstream textile manufacturers were actually pleased with this result as it exceeded expectations amid bleak textile demand in various countries.

Data from API show that Indonesian textile exports to key markets have declined. Shipments to the USA fell 3.6 per cent (y/y), to the European Union by 4.0 per cent (y/y), and to Japan by nearly 5 per cent in the January-June 2017 period, the reports said.

Sudrajat said the apparel trade balance of Indonesia has improved markedly since the start of the year as the government had discouraged cheap imports into Indonesia to protect local industries. Meanwhile, more than 50 clothes factories have been relocated to Central Java where they are using more efficient technology. Therefore their output is also more competitively priced on the world market.

“Improved competitiveness (in terms of price and delivery) explains why demand is negative but Indonesian exports are positive,” Sudrajat explained. “Moreover, foreign importers may now be more confident in Indonesia’s economic and political stability.”

Based on data from Indonesia’s Industry Ministry, the textiles and textile product sector contributed $11.87 billion in foreign exchange earnings, or 8.2 per cent of Indonesia’s total export earnings in 2016. Meanwhile, investment in this sector reached approximately $567 million in 2016, according to reports. (SV)

Fibre2Fashion News Desk – India

Vietnam can fully absorb polyolefins from Long Son project – Vietnam polyolefins

Vietnam polyolefins  Vietnam polyolefins  Vietnam polyolefins  Vietnam polyolefins  Vietnam polyolefins  

INTERACTIVE: Vietnam can fully absorb polyolefins from Long Son project

Source:ICIS News

Vietnam polyolefins

SINGAPORE (ICIS)–Vietnam could fully absorb the huge polyolefin production expected from Siam Cement Group’s (SCG) Long Son Petrochemical Complex (LSPC), which is due to start up in 2022, according to analysts.

The country imported about 2.3m tonnes of combined polyethylene (PE) and polypropylene (PP) last year.

LSPC, which will be the country’s first petrochemical complex, is located around 100 kilometres away from Ho Chi Minh City – Vietnam’s main market and economic heartland.

“We see several positives in the project,” according to analysts at Japanese brokerage Nomura Securities. “This is the first petchem cracker in Vietnam, which we see as an attractive and currently under-supplied market.”

Thai conglomerage SCG said on 14 July that a decision has been made to proceed with the $5.4bn or baht (Bt) 188bn LSPC project, which will be financed by 60% debt and 40% equity.

Non-petrochemical supporting infrastructure, such as a deep sea port and other facilities, will account for about 30% of the total investment cost, according to SCG.

SCG indirectly owns 71% of the project via its wholly-owned subsidiary Vina SCG Chemicals Co (VSCG), while state-owned oil and gas firm PetroVietnam holds the remaining share in the project.

LSPC will house a 1m tonne/year cracker with flexible gas and naphtha feed, to yield up to 1.6m tonnes/year of olefins, depending on the feedstock mix, the company said.

The feedstock will consist of locally sourced ethane, as well as imported propane and naphtha, it said.

“The downstream polyolefin operations will be of similar scale to the cracker, consisting of high density polyethylene (HDPE), linear low density polyethylene (LLDPE) and polypropylene (PP) plants,” the company said.

The project is estimated to be completed in four-and-a-half years, with commercial operation expected by the first half of 2022, according to SCG.

Partnering with PetroVietnam is a key strategic advantage for SCG that should help navigate regulatory issues, according to Nomura.

SCG began its business operations in Vietnam in 1992 with a trading unit, and gradually expanded investments into diversified businesses in the cement-building materials, chemicals, and packaging industries.

The LSPC project had been stalled for years amid the downturn of the oil and petrochemical prices in 2014, and was hit by another setback when Qatar Petroleum International (QPI) withdrew from the project in December 2015.

QPI, which was supposed to be the feedstock supplier for the project, sold to SCG its 25% stake in Long Son Petrochemicals Co, which is the joint venture firm that will operate the new complex.

SCG is confident that it will be able to source feedstock on-long term contracts from other suppliers in the market, noted Singapore-based DBS Group Research.

“Our key concern is on the outlook during the early years after the plant commences as we expect the industry cycle for the petrochemical business to enter a tough period when new capacity (including the Long Son project) enters the market. This could be a drag on SCG’s earnings performance during those years,” it said.

According to Krungsri Securities, global ethylene supply growth will match the increase in demand at 4% per year over 2017-2021, and take global ethylene capacity to 197m tonnes by 2021.

Eight new crackers with a combined 11m-ton capacity will be using shale gas, representing a third of the 35m tons of total new ethylene capacity.

For propylene, supply is expected to grow 5% in 2017, 4% in 2018, and 3% per year over 2019-2021. Total supply will reach 143m tons by 2021, with the bulk of new capacity in north Asia, and produced through the propane dehydrogenation (PDH) process. This will account for 14% of global propylene capacity, the Thai brokerage said.

Another 9% will be from the coal-to-olefins (CTO) and methanol-to-olefins (MTO) process.

“It remains unclear if all announced CTO and MTO capacity will commence as planned because these operations require abundant water. Some areas in China may not have the required water supply,” Chantaraserekul said.

In the near term, SCG’s management believes that chemical spreads will remain strong through 2021 before the start-up of LSPC, led by stable demand growth and limited new supply, he said.

Chemicals will remain as the key earnings driver for SCG this year, Chantaraserekul said.

In 2016, chemicals had a 75% contribution to the conglomerate’s total earnings.

Please click on the full screen button on the bottom-right of the infographic below to view in full screen.


($1 = Bt33.60)

Picture (top): A SCG building (Source: SCG website)

Focus article by Nurluqman Suratman

By Nurluqman Suratman

Initial US August BD contract nominated at 8 cent/lb decline – US August Butadiene

US August Butadiene US August Butadiene US August Butadiene US August Butadiene US August Butadiene US August Butadiene 

Initial US August BD contract nominated at 8 cent/lb decline

Source:ICIS News

Focus article by Jessie Waldheim

HOUSTON (ICIS)–US butadiene contract prices for August have been nominated by a producer at an 8 cent/lb decline, sources said on Thursday.

US August Butadiene If accepted by buyers, the nomination would put the producer’s August contract price at 37 cents/lb ($816/tonne), about an 18% decline from 45 cents/lb in July.

Weak global prices and domestic length have kept pressure on the US BD market, leading to expectations of drop for August contract prices.

“That’s maybe down a little bit more than I expected, but not all that surprising,” one market source said.

Other sources had expressed surprise.

“I was expecting they would go for the 40-42 cents/lb range,” a buyer said.

Contract prices have dropped by 65 cents/lb since reaching a multi-year high of 110 cents/lb in March, as lengthening domestic supply and falling global prices have pressured the market.

Domestic supply began to lengthen in the second quarter as earlier production issues were resolved and as downstream outages began in late March. One derivative plant restarted in June after a turnaround. Another, which was shut down in late March and sold in June, remains closed.

Supply was further bolstered by increases to olefins capacity in the US Gulf, through both new and expanded crackers. The trend is expected to continue, with several new crackers expected to come online in the second half of 2017.

Meanwhile, a decline in global BD prices further pressured the US market. Since March, spot prices in Asia have fallen by about $2,000/tonne, and contract prices contract prices in Europe have fallen by about €925/tonne.

A late June rebound in Asia led to expectations that the global market could stabilise or strengthen. However, that rebound stalled in July, and the outlook in the region has weakened due to incoming shipments, some of which were sent from the US.

Market participants await for individual nominations from three other US producers.

US BD contracts typically settle at the end of the month for pricing in the upcoming month.

Major US BD producers include ExxonMobil, LyondellBasell, Shell Chemical and TPC Group.

In cents/lb Aug Nom Jul Settle
Producer 1 37 45
Producer 2 TBD 45
Producer 3 TBD 45
Producer 4 TBD 45

By Jessie Waldheim

Oil dives 2 percent; consultant sees OPEC crude output rise in July – Crude Oil OPEC output

Crude  Oil OPEC output Crude  Oil OPEC output Crude  Oil OPEC output Crude  Oil OPEC output Crude  Oil OPEC output Crude  Oil OPEC output 

Oil dives 2 percent; consultant sees OPEC crude output rise in July

Julia Simon

Crude Oil OPEC output

FILE PHOTO: A worker checks the valve of an oil pipe at Nahr Bin Umar oil field, north of Basra, Iraq December 21, 2015.Essam Al-Sudani/File Photo

NEW YORK (Reuters) – Oil prices fell more than 2 percent on Friday after a consultant forecast a rise in OPEC production for July despite the group’s pledge to curb output, reigniting concerns the global market will stay awash with crude.

Both Brent and U.S. crude tumbled more than a dollar a barrel and were headed toward weekly losses of more than 1.3 percent after Petro-Logistics said OPEC crude production would rise 145,000 barrels per day (bpd) this month. Petro-Logistics, which tracks OPEC supply forecasts, said this would take the group’s combined output above 33 million bpd.

Higher supply from Saudi Arabia, the United Arab Emirates (UAE) and Nigeria would drive this month’s gains, it said.

Benchmark Brent crude futures LCOc1 were down $1.03 or around 2.1 percent at $48.27 a barrel at 1:17 p.m. (1717 GMT) while U.S. West Texas Intermediate (WTI) crude futures CLc1 traded at $45.89 a barrel, down $1.03 or 2.2 percent.

OPEC and some non-OPEC states, such as Russia, have been trying to cut production 1.8 million bpd through the end of March 2018.

The UAE energy minister, whose country’s oil output has been rising, said he was committed to the output cut and he hoped the deal would have a significant impact in the third and fourth quarters.

“We have the OPEC meeting in Russia on Monday and that’s going to be top of mind,” said Dan Katzenberg, Senior Exploration and Production analyst at Baird and Co in New York.

The meeting gathers several ministers from OPEC and non-OPEC member countries in St. Petersburg. Kuwaiti Oil Minister Essam al-Marzouq, whose country heads the joint ministerial committee, said attendees would discuss continuing the production cuts.

The committee, known as the JMMC, can make recommendations to adjust the deal if needed, but analysts expressed skepticism that the group will address rising production from Nigeria and Libya, two OPEC members exempted from the cuts.

“There’s no expectation. ..that there’s going to be anything of substance in that meeting,” said Katzenberg.

“Libya and Nigeria won’t be too enthusiastic to cap their production,” said Frank Schallenberger, head of commodity research at LBBW.

The discount of U.S. crude futures front-month versus the second-month CLc1-CLc2 briefly fell to just 12 cents per barrel during the trading session, the lowest since December 2014. This makes it less profitable for speculators to buy oil, sell it forward and store it in the meantime.

U.S. oil drillers cut rigs for a second week since January, with producers cutting one rig in the week to July 21, Baker Hughes said. Analysts said the decline was likely a pause in a drilling recovery expected to continue through at least 2019.

Additional reporting by Karolin Schaps in London, Fergus Jensen in Singapore; Editing by Mark Potter and David Gregorio

PET Exports to EU – Polyethylene terephthalate (PET) Eu Pakistan

Polyethylene terephthalate (PET) Eu Pakistan Polyethylene terephthalate (PET) Eu Pakistan Polyethylene terephthalate (PET) Eu Pakistan Polyethylene terephthalate (PET) Eu Pakistan

PET Exports to EU

  • BR Research

There has been a certain combination of hue, cry and pats on the back regarding the countervailing duties imposed on Pakistan’s polyethylene terephthalate (PET) exports to the EU. Popularly known as resin, PET is bottle-grade polyester chip that is used in the production of disposable bottles for beverages.

Polyethylene terephthalate (PET) Eu Pakistan

In 2010, the European Commission imposed a definitive countervailing duty rate of 5.1% (€44.02 per ton) on Pakistan’s PET exports to EU, which expired in 2015. The basis of this duty was the finding by the European Commission that Pakistan’s PET exports to the EU were “causing a material injury to the Community industry”.

The Government of Pakistan took the case to the World Trade Organisation (WTO) dispute settlement system a few months before its expiry, possibly because traditionally the EU does not renew trade restrictions of this sort if they have been challenged in the WTO.

Early this month, the WTO ruled in Pakistan’s favour, stating that the measures applied by the Commission on Pakistan’s PET exports were inconsistent with the Subsidies and Countervailing Measures Agreement (SCMA) of the WTO.

Polyethylene terephthalate (PET) Eu Pakistan

This ruling has been hailed as a victory and a diplomatic success by trade experts, with the hope that Pakistan’s PET exports will rise. However, in the hue and cry, Pakistan’s PET exports composition and opportunity in other markets seems to have been overlooked. Admittedly, Pakistan’s PET exports to EU consisted of a major chunk of Pakistan’s total exports till 2010. Post implementation of the countervailing duty in 2010, Pakistan’s PET exports to EU declined but overall PET exports to the world increased by 22%. This is because PET exports to Turkey increased by $21 million, from 2010 to 2011. Since then exports to Turkey have declined steadily. Over the last 5 years, PET exports to Turkey have declined by 82 percent because of the imposition of safeguard duty by Ankara from 3 percent to 8 percent.

Chemicals are one of the main items of export to Turkey of which PET is one. This point should be remembered in the next round of negotiations for the Pakistan-Turkey FTA that is in the works.

Polyethylene terephthalate (PET) Eu Pakistan

Another important market for Pakistan’s PET exports is USA. Over the last 10 years, Pakistan’s exports to US have been increasing steadily. US’s total imports of PET stood at $1 billion in 2016 of which Pakistan’s share was 4%, implying that there is a lot of potential for Pakistan’s exports to USA to grow.

EU’s total PET imports in 2016 were $3 billion, thus there is a reason to applaud the removal of countervailing duties. However, USA and Turkey are also big markets that have a lot of potential and in the hue and cry of duties imposed by the EU; their potential seems to have been overlooked.

While working on making the best use of the GSP Plus offered to Pakistan, the opportunity to develop other markets should not be missed.

Copyright Business Recorder, 2017

Campaign launched for flame retardant-free car seats – Flame Retardant car seats

Flame Retardant car seats Flame Retardant car seats Flame Retardant car seats Flame Retardant car seats Flame Retardant car seats

Campaign launched for flame retardant-free car seats

Flame Retardant car seatsA coalition of US NGOs is calling on children’s car seat manufacturers to phase out the use of flame retardant chemicals.

The Car Seat Detox Challenge campaign has been launched by the Ecology Centre in partnership with Safer Chemicals, Healthy Families, Healthy Babies Bright Futures, the Getting Ready for Baby coalition and Safer States.

The centre says the flame retardants historically used in car seats to meet federal flammability standards include known carcinogens, hormone disruptors and developmental toxicants.

A study it published last December, Travelling with Toxics, said 87% of car seats tested by the group in 2016 contained brominated flame retardants (BFRs). The group analysed 15 car seats from the US and UK. All contained the chemicals and 13 contained BFRs, which it says are persistent, bioaccumulative and often toxic.

The group says halogenated compounds (including BFRs), triaryl phosphates and other added toxic flame retardant chemicals have been shown to migrate out of products to contaminate air and dust.

None of the car seats tested contained chlorinated tris, which was found in three of 15 car seats tested by the centre in 2014. Although the market has shifted from the use of chlorinated flame retardants, says the group, these have been replaced with “a number of chemicals with uncertain hazards”.

The NGO coalition has written to several car seat manufacturers, asking them to commit to developing a public safer chemicals policy and action plan to address hazardous chemicals over the next year.

It says federal motor vehicle safety standards can be met without the use of flame retardants. This year, the manufacturer Uppababy released the Henry MESA car seat, which uses wool to make the fabric naturally fire resistant.

The NGO campaign recommends that car seat manufacturers’ chemical policies should:

  • create a restricted substances list, or update their existing one, to address halogenated and other toxic flame retardants, heavy metals, perfluorinated chemicals, PVC plastic, ortho-phthalates, antibacterial chemicals of concern, and other chemicals “known or suspected of causing cancer, hormone disruption, neurotoxic and other serious chronic health effects”;
  • ensure products comply with the list through third party laboratory testing; and
  • conduct alternatives assessments using a tool such as GreenScreen to ensure chemicals of concern are not substituted with other harmful chemicals.

Melissa Sargent, of the Ecology Centre, told Chemical Watch that although no companies have made the commitment yet, she hopes they will take notice of an online petition with more than 38,000 signatures calling for action.

“It’s not that these companies want to put anything out there that is toxic to children, it’s just where the technology is right now. We’re hopeful we’ll have some positive feedback from companies.”

But the Juvenile Products Manufacturers Association (JPMA) says car seats do not expose children to hazardous chemicals.

Executive director Kelly Mariotti told Chemical Watch the NGOs “have failed time and again to produce a board-certified toxicology report to support these claims, which is misleading to parents.”

She added that her members “take great care in meeting and exceeding the strict federal and state flammability requirements for juvenile products, and whenever possible, work to find ways to meet regulatory mandates and manufacture products as naturally as possible.”

Bryan Goodman of the American Chemistry Council said flame retardants on the market are subject to review by the US EPA and other regulatory bodies around the world, “so consumers do not have to choose between fire safety and chemical safety”.

In response, the Ecology Centre said it relies on academic and independent research for health data and a number of studies have raised concerns about the widespread use of flame retardants.

Tammy Lovell
Business Reporter

A Viet Tien garment production line – Vietnam Viet Tien garment

Vietnam Viet Tien garment Vietnam Viet Tien garment Vietnam Viet Tien garment Vietnam Viet Tien garment Vietnam Viet Tien garment 

A Viet Tien garment production line (credit: VNA)

NDO/VNA – Vietnam is a potential market to which Indian businesses are seeking opportunities to boost export of textile machines and equipment, said N.D. Mhatre, Director General (Technical) of the Indian Textile Accessories and Machinery Manufacturers Association (ITAMMA).

Vietnam Viet Tien garment

As one of the world’s leading textiles and garment exporters, Vietnam has a growing demand for machinery and equipment, thereby creating big opportunities for Indian firms, Mhatre said at a Vietnam-Indian business exchange programme co-held by ITAMMA and the Consulate General of India in HCM City on July 20.

The director noted that India’s export turnover of textiles-garment machinery and equipment surpassed US$400 million in 2016, but its earnings from Vietnam reached only US$400,000.

Therefore, Indian enterprises wish to boost trade promotion and business networking in the garment and textiles sector in order to build up long-term cooperative ties, he added.

In addition, ITAMMA plans to set up a textiles-garment technology centre in Ho Chi Minh City to introduce machines, equipment and provide after-sale services to Vietnamese customers. It will also serve as a venue for the two countries’ businesses to exchange and update on the latest technologies in the field.

Participants shared a view that Indian businesses have opportunities to supply machines and equipment with affordable prices to the Vietnamese market as machines imported from Europe have high prices.

Nguyen Thi Tuyet Mai, Vice General Secretary of the Vietnam Textile and Apparel Association (VITAS), also affirmed that India is an important trade partner of Vietnam in the field of garment-textiles and machinery, while Vietnam is a potential market for Indian businesses.

This is a convenient time for Vietnamese and Indian companies to enhance cooperation in the garment-textiles sector, she said, suggesting that Indian firms should work with Vietnamese fabric and textile factories to create material supply chains in Vietnam, bringing long-term benefits to both sides.

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