In 2021, the global economy recovered from the previous year’s recession, despite the ongoing COVID-19 pandemic. The International Monetary Fund estimates that growth amounted to 5.9 percent in 2021 (‑3.1 % in 2020). The economy in industrialized nations is expected to have expanded by 5 percent (2020: -4.5 %). At 5.6 percent (2020: ‑3.4 %), growth in the USA was higher than that of the Eurozone at 5.2 percent (2020: -6.4 %). As in the previous year, China recorded above-average growth of 8.1 percent (2020: 2.3 %).
Despite the economic recovery, 2021 was characterized by numerous economic challenges: supply failed to keep pace with demand in many areas of the global economy. In addition to further reasons, including structural reasons, this led to significant price increases, particularly in the energy area, and to problems in global supply chains.
For 2022, the IMF forecasts growth of 4.4 percent. However, a continuation of the economic recovery remains exposed to risks, especially the further course of the pandemic and its implications for individual economic sectors.
Global fiber market2
Global demand recovers to pre-crisis levels; fiber production continues to rise
Following the pandemic-related shock in the previous year, the demand situation in the textile and apparel industry largely recovered in 2021. Retail sales of apparel returned to pre-crisis levels worldwide. However, major regional differences were evident: in the USA, sales increased by up to 50 percent year-on-year, to stand some 10 to 15 percent above pre-crisis levels. Sales in China were stable, although only just above their 2019 level, while EU sales were almost 20 percent below their 2019 level. Sales in Japan were down by as much as 20 to 25 percent. These differences, some of which are very significant, are particularly due to local infection patterns and the government measures taken.
The extensive recovery in the textile and apparel industry and continuing high demand for medical and hygiene products, which also led to strong demand for nonwoven fibers in 2021, fed through to a significant recovery in the world fiber market. Initial estimates suggest that production levels on the world fiber market are likely to have risen by 2 to 3 percent year-on-year to 116 mn tonnes.
Cotton production decreased by 7 percent to 24.3 mn tonnes in 2020/2021, according to preliminary estimates. This is mainly due to the effect of comparatively high crop yields in the 2019/2020 pre-season. Demand rose by 13 percent to 25.7 mn tonnes. Cotton stocks subsequently reduced, but still remained above 2019 levels.
Wood-based cellulosic fiber production in 2021 increased by 8 percent to set a new high of 7.3 mn tonnes, supported by strong demand and capacity expansions. The production of modal and lyocell fibers rose at an above-average rate.
Production volumes of synthetic polymer fibers grew by almost 6 percent to 78.5 mn tonnes, according to initial estimates. Polyester fibers reported the fastest growth in 2021. Polyamide, polypropylene and acrylic fibers were at lower levels, due mainly to price disadvantages compared to polyester, and difficulties in raw material supplies.
Price trends further affected by COVID-19
The ongoing COVID-19 pandemic continued to affect the general price level for staple fibers in 2021. Prices for a number of fiber types recovered, in some cases significantly, as demand returned.
The cotton price amounted to 127.2 US cents per pound as of December 31, 2021, corresponding to an increase by 50 percent compared with the beginning of the year. On average, the cotton price was 41 percent higher than in the previous year. The rise in cotton prices is only partly attributable to fundamental factors. It is primarily driven by dynamics on international commodity markets and problems in the global supply chain.
Prices for standard viscose hardly changed over the year. At RMB 12,000 per tonne, the year-end price was only 4 percent higher than that at the previous year-end. However, price trends were subject to significant fluctuations over the course of the reporting year. In the first quarter, prices recorded a significant recovery from the COVID-19 crisis to peak at RMB 15,600 per tonne as of the end of February. As a consequence, prices came under pressure in an environment of subdued demand and rising stocks. In September, the Chinese government imposed measures to reduce energy consumption in industry. This also affected the textile value chain, such as spinning and weaving mills, which in turn had a negative impact on fiber demand and viscose price trends. A brief recovery phase was followed by further decreases in prices from the end of November with the emergence of the omicron variant. Average 2021 prices for standard viscose stood 45 percent higher than the previous year’s average.
Prices for wood-based specialty fibers such as those of the TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ brands were much more stable than those for standard fibers.
The Chinese import price for fiber pulp, the key raw material for the production of wood-based cellulosic fibers, rose by 24 percent to USD 905 per tonne during the year, outpacing the increase for paper pulp. In the meantime, the price had even risen to USD 1,106 per tonne in April. Supporting factors for the sustained high price level included a supply shortage due to supply bottlenecks and logistical problems, as well as higher demand at the end of the year. At USD 991 per tonne, the average price for the year was 36 percent higher than in the previous year.
The polyester price in 2021 was affected by significant price fluctuations for crude oil and intermediates, as well as a recovery in demand. The price of polyester staple fiber in China rose by 19 percent year-on-year to RMB 7,020 per tonne at the end of the year. The average price for the year was also RMB 7,020 per tonne, 20 percent higher than the previous year’s average.
1 Source: IMF, World Economic Outlook, January 2022
2 All production-related figures in this section were updated from the initial estimates published in the Annual Report 2020. Source: ICAC, IWF, Cotton Outlook, CCFG, FAO