In an effort to explore new market opportunities beyond the competitive Indian acrylic fiber sector, Indian Acrylic Resins (IAL) is actively expanding its export operations into the Chinese market. Notably, the price of acrylic fiber in India remains higher than what is offered in China. According to *Asian Chemical News*, IAL is set to open its first warehouse in Shanghai at the end of October, signaling a strategic move toward strengthening its presence in the region.
But why are Indian manufacturers selling at lower prices in China? IAL’s management explained that their export strategy is driven by two key factors: first, they anticipate a long-term rise in acrylic fiber prices in China, and second, domestic demand for acrylic spinning and garments in India is expected to weaken, leading to reduced demand for acrylic fiber. The company believes that without expanding its market share now, it risks losing competitiveness in the long run.
Industry analysts highlight that in 2004, China consumed around 1.2 million tons of acrylic fiber, with projections indicating this could rise to 1.5 million tons annually in the coming years. However, current production capacity in China stands at only 500,000 to 650,000 tons per year. Recently, acrylic fiber prices in China have been relatively weak, dropping from $1,950–$2,000 per ton at the start of the year to $1,700–$1,750 per ton. In contrast, the Indian market currently offers prices between $2,000 and $2,040 per ton.
As India's largest acrylic fiber producer, IAL operates a plant in Punjab with an annual capacity of 42,000 tons. Currently, 30% of its output is exported, with approximately 7,000 to 10,000 tons shipped to China in the fiscal year ending March 31, 2005. Despite the lower prices in China, IAL remains optimistic about the market’s growth potential and plans to increase exports to 12,000 tons during the 2005–2006 fiscal year. This expansion reflects the company’s confidence in the long-term prospects of the Chinese acrylic fiber industry.
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