Honduras transforms its textiles Sector – Honduras textiles Sector

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Honduras transforms its textiles sector

 Honduras textiles Sector Honduras’ textiles and apparel sector has attracted US$1.5 billion in strategic investments to help transform the country into one of the world’s major players in the booming synthetic yarn and activewear market.

The funds have been used to modernise sewing machines and other equipment, expand industrial parks, improve port and road infrastructure, train workers, and build renewable energy facilities with the goal of slashing electricity costs, according to Ramfiz Rodriguez, international promotion and communication manager of Honduras2020, a public-private partnership to stimulate economic development.

The goals for the textiles sector, one of Honduras2020’s strategic pillars, include increasing annual exports to US$7.4 billion and adding 200,000 jobs to the existing 150,000 by 2020.

New technology

Several Honduran investors pooled US$73 million in January to launch the synthetic texturised yarn production plant United Textiles of America (Unitexa), slated to begin operations in the summer of 2018. The plant will have the capacity to produce more than 25,000 tonnes per year of Drawn Texturized Yarn (DTY) in a range of dimensions and textures, to be used for the elaboration of synthetic sport, moisture-wicking, stain-resistant and other high-performance fabrics for clothing and footwear. Rodriguez says synthetic textiles manufacturing lead times and costs will become even more competitive once the high-tech yarn is produced locally instead of imported.

According to Rodriguez, Honduran textiles giant Elcatex and others are ramping up synthetics output in Honduras, while several US, Chinese and European investors are already considering opportunities both in synthetics manufacturing facilities and in distribution centres to service e-commerce. Several plants in the country have already incorporated new technologies for the use of recycled synthetic fibres.

Number one supplier

Rodriguez says that with more than 30 years of experience in the industry, Honduras is Central America’s top textiles exporter. According to the Honduran Maquiladora Association (AHM), it is hoped exports of textiles and clothing will increase from US$4.1 billion in 2016 to US$4.5 billion this year. The industry is one of Honduras’ main export and employment generators, comprising nearly 260 companies operating in 16 industrial parks.

Some 83% of Honduran textiles exports are destined for the US market, Honduras2020 data shows. The country is the US’s number one supplier of cotton T-shirts and number two supplier of fleecewear, according to the United States Trade Office. Honduras’ goal is to surpass Indonesia and Mexico to become the US’s 5th most important apparel provider, Rodriguez explains.

Multinational textiles companies operating in Honduras include Fruit of the Loom, which established itself in 1993 and now operates eight production plants across the country. Hanes operates 13 industrial plants and has been established in Honduras for more than a decade. The Canadian company Gildan Activewear, which initiated operations in Honduras in 1997, has chosen Honduras as the site of many of its modern manufacturing facilities for socks, sportswear, underwear and screen printing, and is preparing to build a new textile plant to increase its production capacity.

Reasons for producing in Honduras

Proximity to the US, competitive production costs, a highly specialised labour force, low worker attrition, ongoing worker training, product quality, the adaptability of production facilities to changing consumer tastes, attractive tax benefits and environmental and social sustainability practices are some of the reasons foreign companies cite as their reasons for producing in Honduras, Honduras2020’s international promotion and communication manager explains. Preferences granted to Honduran textiles under the Free Trade Agreement of Central America (CAFTA) include free access to the US market.

Infrastructure has been another priority, with significant investments being made in Puerto Cortes–the only deep-water port in Central America and the first in Latin America with CSI and Megaport certifications from the US government–as well as in the highways leading to and from it. Puerto Cortés is being expanded to double its cargo management capacity to more than 1.2 million twenty-foot equivalent units (TEUs), according to Honduras2020.

Honduras has also invested heavily in technology to ensure the sustainability of textile manufacturing. All textiles production plants treat and recycle the water and salt used in the fabric dyeing process, says Rodriguez.

www.hondurasmarcapais.com

Novares opens a new production plant in Romania – Novares production plant Romania

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Novares opens a new production plant in Romania

Novares production plant Romania

Only two days after rebranding as Novares, the French automotive parts supplier formerly known as Mecaplast_key Plastics has opened a new production plant in Mioveni, Romania.

The new Mioveni plant, located near Pitesti in Romania, is part of the company’s strategic bid to offer “global proximity” to its customers.

Novares said 21 Sept that as part of the strategy, its production sites in Romania are particularly to serve its main customer, automotive manufacturer Dacia.

“The objective for this industrial site is to support the production of quality components and systems for both the Dacia Duster and Logan car models,” said the French automotive supplier.

In terms of product offering, the plant, similar to Novares’ plant in Gebze, Turkey, will supply “complete solutions such as air filters and automotive roof rails.”

The company said it was planning to add a full painting line for roof bars and would most likely add new lines for interiors and car body trims in 2018.

The facility currently employs 40, a figure which is expected to double by the end of the year, and grow to 130 by 2018.

Novares offers car manufacturers and Tier-1s with a complete portfolio of 7 distinct product lines: engine components, e-powertrain components, bezels & clusters, air vents & deco trims, interior & car body trim, handles and exterior paint & surfaces.

“We affirm our growth strategy and expansion ambition, because we believe global proximity is what our customers’ request – complete solutions for pragmatic service and more responsiveness” said Pierre Boulet, CEO of Novares.

US September MEG contracts increase on tighter US markets – US September MEG US markets

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US September MEG contracts increase on tighter US markets

US September MEG US markets HOUSTON (ICIS)-US September ethylene glycol industrial-grade (EGI), or monoethylene glycol (MEG), contract prices have been assessed at an increase from August based on market feedback.September MEG contracts were assessed on Friday at 41-47 cents/lb ($904-1,036/tonne) FOB (free on board), an increase of 2 cents/lb.

The contract price increases largely reflect the balance of the market before Hurricane Harvey hit the US Gulf Coast.

As many contract negotiations for September material were concluded last month before the storm, massive price increases were not expected to take place.

The US markets in August had been steady, but somewhat tight, due to average demand from the downstream polyethylene terephthalate (PET) sector, the regular flow of exports to Mexico and Asia, and a turnaround taking place.

However, the markets were disrupted on the supply front in the aftermath of Hurricane Harvey.

View an interactive map of affected petrochemical plants by clicking here and using the drop-down menu to differentiate plants by products, and zoom in to see more details.

Looking ahead, although MEG production is starting to bounce back, an ongoing turnaround, along with supply constraints (force majeures and sales allocations) will keep pressure on domestic supply in October.

Domestic demand from the antifreeze sector is likely to pick up with the onset of the fall/winter season, as peak PET demand winds down.

A source remarked that although its October contracts have not been finalised yet, price increases are looking certain.

One consequence of the supply situation is that the amount of MEG available for exports to Europe and Asia has fallen.

Major glycol producers in the US include Eastman Chemical, Huntsman, Indorama Ventures, LyondellBasell, Nan Ya Plastics, Shell Chemical and MEGlobal.

US September MEG US markets

By Tarun Raizada

Opec succeeds in eliminating oversupply in crude oil market – Opec oversupply crude oil market

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Opec succeeds in eliminating oversupply in crude oil market
by Reuters

Opec oversupply crude oil market

Reuters file picture

Vienna: Opec and other oil producers are clearing a glut that has weighed on crude prices for three years and may wait until January before deciding whether to extend their output curbs beyond the first quarter of 2018, ministers said on Friday.

The Organisation of the Petroleum Exporting Countries (Opec), Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping lift oil prices by 15 percent in the past three months.

OPEC and its allies have been considering extending the deal beyond the end of March when it is due to expire.

Russia’s energy minister said no decision was expected before January, although other ministers suggested such a decision could be taken before the end of this year.

“I think we can return to this issue not earlier than January next year,” Russia’s Alexander Novak said when asked about a timeline for any decision on extending the pact to curb supplies.

Speaking after Friday’s meeting of oil ministers in Vienna, he also said Opec and the other producers needed to continue working closely together well into 2018.

“We need not only to keep up the pace but continue our coordinated joint actions in full, but also work out a strategy for the future, to which we will stick starting from April 2018,” he said, adding oil demand was rising at a “high pace”. Other ministers said a decision on extending cuts could be taken in November when Opec holds its next formal meeting.

“In November, we’re going to take decisions,” Venezuelan Oil Minister Eulogio Del Pino told reporters, adding the group was “evaluating all the options” including an extension to the pact.

Benchmark Brent crude is now trading at more than $56 a barrel, although it is still half the level it was in mid-2014.

Market rebalancing

Kuwaiti Oil Minister Essam Al Marzouq, who chaired Friday’s meeting of the Joint Ministerial Monitoring Committee, said supply cuts were helping cut global crude inventories to their five-year average, Opec’s stated target.

“Since our last meeting in July, the oil market has markedly improved,” Marzouq said as he opened the Vienna gathering. “The market is now evidently well on its way towards rebalancing.”

He said there were a “number of positives” in the market, including stock levels in industrialised OECD states in August that were 170 million barrels above the five-year average, down from 340 million barrels in January.

He also said oil in floating storage was falling and cited a shift of benchmark Brent prices into backwardation, a market condition in which it is more attractive to sell oil immediately rather than keeping it stored. This indicates tighter supplies.

The Kuwaiti minister also said the ministerial monitoring group would continue watching production data, but would also propose a review of export data as well.

Opec officials have said exports have a more direct impact on the international supply than production.

The supply pact sets production limits for participating Opec and non-Opec states but puts no restrictions on export levels, so some producers have been able to keep exports relatively high by dipping into their stored reserves.

In addition, rising crude prices have encouraged US shale oil producers to ramp up output, a further reason why the drawdown on global inventories has taken longer than expected.

Ministers from Libya and Nigeria, both Opec members but exempted from supply curbs as their oil industries recover from years of unrest, were invited to Friday’s meeting.

The Kuwaiti minister said the two nations would contribute to supply cut deal once their production stabilises.

OPEC says winning battle to end oil glut – OPEC battle oil glut

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OPEC says winning battle to end oil glut

The Organization of the Petroleum Exporting Countries, Russia and several other producers have cut production by about 1.8 million barrels per day (bpd) since the start of 2017, helping lift oil prices by 15 percent in the past three months.

OPEC and its allies have been considering extending the deal beyond the end of March when it is due to expire.

Russia’s energy minister said no decision was expected before January, although other ministers suggested such a decision could be taken before the end of this year.

“I think we can return to this issue not earlier than January next year,” Russia’s Alexander Novak said when asked about a timeline for any decision on extending the pact to curb supplies.

Speaking after Friday’s meeting of oil ministers in Vienna, he also said OPEC and the other producers needed to continue working closely together well into 2018.

“We need not only to keep up the pace but continue our coordinated joint actions in full, but also work out a strategy for the future, to which we will stick starting from April 2018,” he said, adding oil demand was rising at a “high pace”.

OPEC ministers unlikely to make specific call to extend oil cuts: sources

Other ministers said a decision on extending cuts could be taken in November when OPEC holds its next formal meeting.

“In November, we’re going to take decisions,” Venezuelan Oil Minister Eulogio Del Pino told reporters, adding the group was “evaluating all the options” including an extension to the pact.

Benchmark Brent crude LCOc1 is now trading at more than $56 a barrel, although it is still half the level it was in mid-2014.

MARKET REBALANCING

Kuwaiti Oil Minister Essam al-Marzouq, who chaired Friday’s meeting of the Joint Ministerial Monitoring Committee, said supply cuts were helping cut global crude inventories to their five-year average, OPEC’s stated target.

“Since our last meeting in July, the oil market has markedly improved,” Marzouq said as he opened the Vienna gathering. “The market is now evidently well on its way toward rebalancing.”

He said there were a “number of positives” in the market, including stock levels in industrialized OECD states in August that were 170 million barrels above the five-year average, down from 340 million barrels in January.

He also said oil in floating storage was falling and cited a shift of benchmark Brent prices into backwardation, a market condition in which it is more attractive to sell oil immediately rather than keeping it stored. This indicates tighter supplies.

The Kuwaiti minister also said the ministerial monitoring group would continue watching production data, but would also propose a review of export data as well.

OPEC officials have said exports have a more direct impact on the international supply than production.

The supply pact sets production limits for participating OPEC and non-OPEC states but puts no restrictions on export levels, so some producers have been able to keep exports relatively high by dipping into their stored reserves.

In addition, rising crude prices have encouraged U.S. shale oil producers to ramp up output, a further reason why the drawdown on global inventories has taken longer than expected.

Ministers from Libya and Nigeria, both OPEC members but exempted from supply curbs as their oil industries recover from years of unrest, were invited to Friday’s meeting.

The Kuwaiti minister said the two nations would contribute to supply cut deal once their production stabilizes.
Source: Reuters (Reporting by Ahmad Ghaddar, Alex Lawler, Vladimir Soldatkin and Shadia Nasralla; Writing by Edmund Blair; Editing by Keith Weir)

Going stateside: UK Injection molder heads to US – UK Injection molder US

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Going stateside: UK Injection molder heads to US

Refinery demand, not OPEC, is the key to keeping oil prices above $50 a barrel, analysts say – Refinery demand OPEC oil prices Dollars 50 barrel

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Refinery demand, not OPEC, is the key to keeping oil prices above $50 a barrel, analysts say

  • Oil exporters meet in Vienna on Friday to discuss their agreement to cut output.
  • Analysts say they are more focused on the demand outlook, which has grown stronger.
  • Sustained high demand at refineries is the key to keeping an oil price rally going, they say.
Tom DiChristopher |

 

Refinery demand OPEC oil prices Dollars 50 barrel OPEC should be happy, 2017 seen phenomenal demand: Energy Aspects 

Oil exporters meet in Vienna on Friday to discuss their pact to cut production, but many analysts are not focused on Austria this week. Instead, they’re watching refineries around the world for signs that the oil price rally can continue.

U.S. West Texas Intermediate crude hit a nearly four-month high at $50.81 on Thursday, despite three straight weeks of rising stockpiles in the aftermath of Hurricane Harvey, which shut a quarter of U.S. refining capacity. On Friday, international benchmark Brent crude oil was trading within $2 of its 2017 high of $58.37.

This comes as the market focus has flipped from how quickly OPEC can drain a global glut of crude oil to how hungry the world remains for fuel. A major catalyst for the recent run-up was improved forecasts for 2017 global demand from the International Energy Agency and OPEC.

“There are times like these when [refiners will] push the envelope, especially when the envelope is getting stuffed with cash.” -John Kilduff, Again Capital founding partner

Now, there are signs three years of oversupply are coming to an end.

Brent has flipped into backwardation, meaning prices for immediate delivery are higher than contracts for future shipment. That is a sign traders believe the market is tightening. It also helps to empty stockpiles by encouraging traders to sell oil immediately, instead of storing it to take advantage of higher prices in the future.

Brent crude price curve, source: Factset

Refinery demand OPEC oil prices Dollars 50 barrel

Crude stockpiles have fallen in the OECD, a group of mostly developed nations, throughout the second quarter, OPEC notes in its September bulletin. OECD inventories stood at 195 million barrels above the five-year average in July, down from about 340 million barrels above that level at the start of 2017.

OPEC highlights the role of its production cuts in driving down stocks in the bulletin. The group, along with other exporters, is keeping 1.8 million barrels off the market through March. Friday’s producer meeting ended without the group agreeing to extend the cuts, Reuters reported.

“Over the first half of the year, the collective efforts of participating producer nations have pulled close to 350 [million barrels] in aggregate from global supply,” OPEC said. “It is easy to imagine what the market would have looked like had these 24 countries not taken such collective action.”

But OPEC may be giving itself too much credit, according to Matt Smith, director of commodity research at tanker-tracking firm ClipperData. While the cartel and its allies continue to keep a lid on production, their crude exports remain robust, with the exception of Saudi Arabia, he said.

Given that constant, the variable that matters for oil prices is demand, Smith said.

U.S. crude prices, year to date, source: Factset

Refinery demand OPEC oil prices Dollars 50 barrel

“We haven’t really seen a number of OPEC [members] dialing back on their exports. For this momentum to be upset, it would have to come from the demand side,” he said.

U.S. refineries are processing about a million barrels a day less oil than at this time last year due to impacts from Harvey. However, crack spreads — the difference between crude oil and refined product prices — remain wide. That gives refiners a reason to keep processing crude at a time when they’re normally winding down operations to perform maintenance on their facilities.

Refiners may put off some maintenance and keep plants running so they can continue to take advantage of fat profit margins, sustaining demand for feedstock crude oil, analysts said.

“There are times like these when they’ll push the envelope, especially when the envelope is getting stuffed with cash,” said John Kilduff, founding partner at energy hedge fund Again Capital.

Demand for refined petroleum products like diesel has been “remarkable,” but Kilduff believes persistently high U.S oil production will continue to exert downward pressure on crude prices. He is also wary of the prevailing narrative around demand strength.

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Refinery demand OPEC oil prices Dollars 50 barrel

This analyst says crude oil “sweet spot” is $50 and $60 a barrel   

“To the extent it falters, prices will get punished again. That’s really the key here,” he said.

To be sure, U.S. shale oil producers have played the part of the spoiler this year. When crude costs rise, they lock in higher prices for future delivery with buyers. That means they keep pumping today to fulfill those contracts, which makes it harder to reduce oversupply.

However, monthly figures show U.S. oil production flatlining recently, and even dipping in June, said Amrita Sen, chief oil analyst at research consultancy Energy Aspects.

“I think $50 was proving to be too low. Global oil demand growth has been close to 2 million barrels per day, and supplies aren’t growing anywhere close to that. So I think $50 just ended up being a price where there was too much demand, and that’s why we’re drawing way too much inventories now,” she told CNBC on Friday.

High demand for diesel and home heating fuel in particular means refineries are willing to pay more for crude oil, said Tom Kloza, global head of energy analysis at Oil Price Information Service. While recent hurricanes have wiped out demand for gasoline in recent weeks, demand for diesel is likely to remain strong as construction crews fire up heavy machinery to rebuild storm-ravaged areas, he noted.

“Those high margins translate into less resistance for crude oil prices that are a few dollars higher,” he said.

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