16 March 2010 07:11 [Source: ICIS news]
By Helen Lee
SINGAPORE (ICIS news)--Pakistan-based footwear makers have been holding back purchases of foaming grade ethylene vinyl acetate (EVA) amid spikes in raw material prices and rising popularity of polyurethane footwear in the South Asian country, industry sources said on Tuesday.
Spot prices of foaming grade EVA with 18% vinyl acetate (VA) content in South Asia surged 42.7% from lows in October 2009 to current $2,030-2,080/tonne (€1, 482-1,539/tonne) CFR (cost and freight) South Asia – a 18-month high, according to global chemical market intelligence service ICIS pricing.
The prices had surged recently on the back of strong demand from EVA buyers in ?xml:namespace>
EVA foam is used as padding in equipment for various sports such as ski boots, wakeboard boots while slippers and sandals made from EVA are popular because they are light weight and cheaper compared to natural rubber.
The busiest period for EVA footwear manufacturing spans seven months to August in South Asia, industry officials in
However, unlike their Indian counterparts footwear makers in Pakistan said they were not inclined towards EVA.
“Right now the [raw material] prices are skyrocketing and it is difficult to operate because the market for EVA footwear is very, very slow even though the peak season has started,” said a footwear manufacturer based in
Current demand for EVA footwear was roughly a fifth of existing capacity, the manufacturer added.
“A big reason for that is the entry of polyurethane (PU) footwear especially in the ladies [shoes] sector…,” he said.
Polyurethane (PU) flexible foams are widely used in upholstery, mattresses and automotive seats and in making of shoe soles.
“The average wholesale price of a pair of ladies’ PU slipper is around $2 in the local market and the raw material is easily available...Since PU footwear is a new product and it's fancy, the sales are better then EVA footwear," he added.
The manufacturer said due to popularity of PU footwear, new PU machines were being setup in Pakistan.
“Some people are also making PU machines locally by importing parts from China and they are very successful because the investment required for PU moulds and PU machine is far too low in comparison with setting up an EVA unit," he added.
Meanwhile, strong prices of EVA compound had hit manufacturers hard given prevailing low demand for EVA footwear, industry sources added.
“In spite of such a high increase in EVA compound prices, EVA shoe manufacturers have not been able to pass on the extra cost to the consumers because of low demand in the market and we are still struggling to sell old stocks,” an industry source said.
Footwear manufacturers, along with other big importers of EVA such as traders, doubt the strong prices of the material could be sustained for long that none of them were holding huge stocks, industry sources said.
Buying ideas in Pakistan for March EVA shipments were resultantly mentioned at lows of around $1,900/tonne CFR Pakistan, but India-based converters said it was not possible to secure any cargoes at this price level.
“We booked March loading cargoes from
EVA prices were poised to hover at current highs due to the prevailing peak demand season from India-based footwear makers,
($1 = €0.73)
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