Global economy1
The global economy grew by 3.1 percent in 2023, according to the latest calculations by the International Monetary Fund. With the exception of the pandemic, this represents the lowest annual growth rate since the global financial crisis. While the direct effects of the pandemic receded into the background, the past year was characterized by many other challenges: the war in Ukraine and the escalation in the Gaza Strip determined the geopolitical environment. Tensions over Taiwan intensified and supply chains were disrupted by rebel attacks in the Red Sea. Economic growth was slowed by high inflation and a rise in key interest rates, and many consumers found it difficult to cover the higher costs with their income. Consumer confidence recovered slightly compared to the previous year, but remained below the long-term average. China, in particular, one of the largest textile markets, was expected to experience a more pronounced recovery following the end of the Covid restrictions. However, the economic situation in Europe also proved to be challenging and some countries slipped into recession. For 2024, as well, the IMF is forecasting growth of 3.1 percent.
The long-awaited recovery in demand and prices in the textile and clothing industry also largely failed to materialize. According to a global survey conducted by the International Textile Manufacturers Federation,2 satisfaction with the business situation continued to decrease in the second half of 2023, contrary to expectations, and touched a new low in November 2023. A slight improvement in the business situation was evident in January 2024.
Global fiber market3
Fiber production up slightly
Global retail sales of clothing in 2023 – adjusted for price effects – were up to 5 percent higher than in the previous year, according to preliminary calculations. While sales in the USA and Europe largely stagnated, China made a strong contribution to global sales growth with an increase of 12 percent, driven by domestic demand (and due to the very low prior-year figure reflecting strict Covid measures).
Stock levels at clothing retailers were reduced in part by sales promotion measures, particularly over the Christmas period, but still remained at a high level compared to many years ago. Retailers were reluctant to place orders despite lower stock levels. Stocks at upstream production stages also decreased for the most part.
Demand for home textiles continued to suffer in 2023 due to investments that had been brought forward during the Covid pandemic; private households had invested heavily in furnishing their own living areas during the lockdowns.
Retail sales of hygiene products in the nonwovens industry, which usually prove more resistant to crises, were also under pressure. Volume sales of major brands decreased in some cases, while demand for lower-priced private labels increased.
Fibers on the world market
Global fiber production rose slightly by 1 percent to 120 mn tonnes in 2023, according to initial estimates. Cotton production decreased by 2 percent to 24.8 mn tonnes in 2022/2023, according to preliminary estimates. This is mainly due to a reduction in acreage at the expense of food crops. Demand was down by 8 percent to 23.7 mn tonnes. As a consequence, cotton stocks rose to 21.2 mn tonnes, their highest absolute level since the 2014/2015 season and also above the long-term average in comparison to consumption (stocks-to-use ratio).
The production of regenerated cellulosic fibers such as lyocell, modal, and viscose fibers rose by 3 percent to 7.5 mn tonnes, according to initial estimates. This growth was almost exclusively attributable to the sharp rise in global production of lyocell fibers.
The production volume of synthetic polymer fibers amounted to around 81 mn tonnes, up 1 percent on the previous year, according to initial estimates.
Global fiber production 2023*
by type of fiber in percent (basis = 120 mn tons)
Staple fiber prices remain under pressure
Price trends on staple fiber markets proved to be far less volatile in 2023 than in the previous year. Prices ranged within a much narrower band overall, but remained under pressure.
Cotton prices were far less volatile over the course of the year than in 2022. The Cotlook A index reached its high for the year of 102 US cents per pound at the end of January, driven by high market expectations following the reopening in China. The 2022/2023 cotton season ended with stocks slightly higher, which had a negative impact on price trends. For the year, cotton prices slipped 8 percent to 91 US cents per pound.
The price of polyester staple fibers in China rose by 2 percent to RMB 7,325 per tonne over the course of the year. During the year, it reached a high of RMB 7,970 per tonne in mid-September. The price increase was primarily driven by higher costs for the intermediate products PTA (terephthalic acid) and MEG (monoethylene glycol).
Viscose prices in China also remained within a comparatively narrow range in 2023. Over the course of the year, prices were down by 2 percent to RMB 12,600 per tonne. They peaked at RMB 13,400 at the end of September due to higher chemical costs and seasonally slightly higher demand.
Prices for wood-based specialty fibers decreased slightly due to weaker demand, particularly from brands and retailers, and additional capacity on the market. The price premium commanded by the TENCEL™, LENZING™ ECOVERO™, and VEOCEL™ brands proved to be comparatively resilient.
The Chinese import price for dissolving wood pulp, the key raw material for the production of regenerated cellulosic fibers, was 2 percent below the previous year’s level at USD 880 per tonne as of the end of December. Chinese prices for paper pulp decreased sharply from USD 810 per tonne at the beginning of the year to USD 475 per tonne in mid-May. However, dissolving wood pulp was hardly affected by this decrease, as limited supply due to production downtime encountered slightly higher demand. As the year progressed, however, prices converged again and paper pulp closed the year at USD 653 per tonne.
Staple fiber prices – Development in China*
USD/kg (excl. VAT)
1 Source: IMF, World Economic Outlook, January 2024
2 Source: IMF, World Economic Outlook, January 2024
3 All production-related figures in this section were updated from the initial estimates published in the Annual Report 2022. Sources: The Fiber Year, ICAC, Cotton Outlook, CCFG, FAO