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Why do Indian manufacturers sell at low prices in the Chinese market? IAL's management explained that the company's export growth strategy is based on two considerations: First, in the long term, the acrylic fiber prices in the Chinese market will rise; Second, the demand for acrylic spinning and garments in the domestic market in India , will lead to a weak demand for acrylic fiber. IAL believes that IAL will lose its competitiveness in the long run if the company is not currently able to expand its market share in markets such as China.
Industry analysts pointed out that in 2004, the consumption of acrylic fiber in the Chinese market was 1.2 million tons, and this figure will reach 1.5 million tons/year in the next few years, while China's current production capacity is only 500,000 to 650 tons/year. However, in recent months, China's acrylic fiber prices have been relatively weak and have fallen from 1950 to 2000 US dollars/ton at the beginning of the year to 1,700 to 1,750 US dollars/ton; while in India, the market price of acrylic fibers is between 2,000 and 2040 US dollars/ Ton.
IAL is India's largest producer of acrylic fiber, with an annual production capacity of 42,000 tons of acrylic fiber in Punjab Province, India. Currently, 30% of its production is exported. In the fiscal year ended on March 31, 2005, the company exported 7,000 to 10,000 tons of acrylic fiber products to China. Due to the optimistic growth potential of China's acrylic fiber market, IAL is still preparing to increase its export intensity to the Chinese market despite the fact that China's acrylic fiber prices are lower than those in India. The company plans to export 12,000 tons of acrylic fiber to China in the fiscal year 2005-2006.
Do not hesitate to lose money to seize the acrylic fiber market, Indian companies attack the Chinese market
In order to find more market space outside the demanding Indian acrylic fiber market, Indian Acrylic Resins (IAL) is preparing to increase its export to the Chinese market. It is worth noting that the current price of acrylic fiber in India is higher than the sales price in the Chinese market. According to "Asian Chemical News," the company will launch its first warehouse in Shanghai, China at the end of October.