Cellulose ingredient prices rise due to Chinese fabric demand

18-May-2010 - Last updated on 19-May-2010 at 15:41 GMT

An increase in demand for rayon fabric in China has led to higher prices for microcrystalline cellulose, a stabilizer for foods, drinks and personal care products, and an excipient for pharmaceuticals.

Microcrystalline cellulose is made from high-quality plant and wood pulps that are either used for specialties, such as foods and pharmaceuticals, or for viscose, which is used to make rayon fabric, among other things. Chinese demand for rayon has increased by about ten percent over the past five years as wealth in the country has risen, putting pressure on prices as production has struggled to keep pace.

According to product manager of cellulosics at Philadelphia-based FMC BioPolymer Christopher Poppe, Chinese rayon demand has squeezed the availability of pulp for specialty ingredients.

In the food industry, cellulose-based ingredients are used to stabilize dairy beverages like chocolate milk, and in ice cream.

He also said there has been “a domino effect” caused by a poor Chinese cotton crop this year. Low availability of cotton linter has meant that other pulps are being used instead, adding to the supply problem for specialties.

Such substitution is not possible for the strictly regulated food and pharmaceutical sectors, and FMC BioPolymer announced this week that it will increase the price of all its microcrystalline cellulose products by up to ten percent.

Poppe said: “We can’t just switch. There are very specific pulps approved for pharmaceuticals…Similarly for food, specific pulps are used for specific characteristics.”

He added that viscose prices had risen to around $1600 a ton, up about 50 percent.

“The pulp pricing is not so much driven by our market as it is by the viscose pulps market,” Poppe said. “…Viscose is heavily used in clothing and fabrics. So it’s the demand in China that’s really driving prices.”

Another company that has been hit by rising prices is Ashland Aqualon Functional Ingredients, which supplies the food, pharmaceutical and personal care industries with cellulose esters and guar-derived products. It also announced this week that it would be raising the price of these ingredients by five percent from June 1.

Director, regulated industries at Ashland Hassan Rmaile said: “The demand pressure that is placed on this industry is not easily reduced because there is a high cost of entry to start a new facility and the process to make the product of extremely high purity is not simple.”