Global economy1
The development of vaccines against Sars-CoV-2 gave the global economy a promising start to 2022. As recently as January, the International Monetary Fund was expecting growth of 4.4 percent (2021: 6.2 %). The war in Ukraine, the European energy crisis and high inflation in many parts of the world, as well as China’s zero-Covid policy, subsequently had a significant negative impact on global economic activity. Consumer confidence initially touched long-term lows in Europe and the USA, and subsequently also in China, and has been recovering only slowly since then.
The IMF downgraded its growth forecasts several times over the course of the year. According to the latest calculations, global growth is expected to reach 3.4 percent in 2022. At 2 percent (2021: 5.9 %), growth in the USA was higher than that of the Eurozone at 3.5 percent (2021: 5.3 %). Chinese economic growth slowed to 3 percent (2021: 8.4 %), particularly due to pandemic-related restrictions. For 2023, the IMF expects the global economy to expand by 2.9 percent, thereby reflecting the multiple ongoing crises.
Global fiber market2
Recovery in first half, slump towards end of year, production hardly changed
Sentiment in the textile and nonwovens industry deteriorated abruptly in the third quarter of 2022, and satisfaction with the business situation continued to touch new historic lows throughout the rest of the year.3 In the latter part of the year, the outlook brightened somewhat, although market participants remained concerned about subdued demand.
According to preliminary calculations, global retail sales of apparel in 2022 were 8 percent higher than in the previous year, and 5 percent higher than in the pre-crisis year 2019. As in previous years, major regional differences were apparent: in the USA, sales continued to perform well, increasing by 7 percent compared to the previous year and by 16 percent compared to pre-crisis levels. In Europe, too, sales recovered significantly after the previous year, which was dominated by COVID-19, to a level that was more than 20 percent above the previous year’s level as well as 4 percent above the pre-crisis level. However, sales in both regions weakened towards the end of 2022. In China, apparel sales decreased due to the large-scale lockdowns in the second quarter and towards the end of 2022, and were down by 7 percent year-on-year and by 5 percent compared to pre-crisis levels. Given the positive outlook at the start of the year and in order to avoid supply shortages, many retailers had accumulated high levels of stocks of apparel and textiles in response to supply chain constraints. Combined with growing economic uncertainties in the third quarter, this led to a slump in demand along the textile value chain.
Demand for medical and hygiene products and associated demand for nonwoven fibers normalized after the pandemic had increasingly receded into the background in many regions.
Fibers on the world market
Production levels in the world fiber market are expected to have increased by 1 percent to 119 mn tonnes in 2022, according to initial estimates. Cotton production increased by 5 percent to 25.2 mn tonnes in 2021/2022, according to preliminary estimates. This is mainly due to an expansion of cultivation areas. Demand rose slightly by 1 percent to 25.7 mn tonnes. Cotton stocks decreased as a consequence, but remained above pre-crisis levels both in absolute terms and in terms of the stocks-to-use ratio.
Production of wood-based cellulosic fibers in 2022 reduced slightly by 1 percent to 7.3 mn tonnes, just below the record year of 2021, mainly due to diminishing demand in the fourth quarter. In contrast, global production of lyocell fibers increased significantly.
Production volumes of synthetic polymer fibers were unchanged at 80.9 mn tonnes, according to initial estimates.
Global fiber production 2022*
by type of fiber in percent (basis = 119 mn tons)
Staple fiber prices fluctuate strongly
Staple fiber markets in 2022 were characterized by rising prices in the first half of the year and a significant decrease in demand and prices in the second half, with high volatility throughout.
Cotton prices were extremely volatile during the year. The Cotlook A index reached a long-term high of 173 US cents per pound in May – in the wake of rising commodity prices and loose monetary policy. In the third quarter, the more restrictive monetary policy pursued by many central banks and weakening demand led to lower prices, as was also the case on global commodity markets. This trend continued in the fourth quarter. For the year, cotton prices slipped 22 percent to 99 US cents per pound. By historical standards, however, they remain at an elevated level.
The price of polyester staple fiber in China hardly changed year-on-year, increasing by 2 percent to RMB 7,175 at the end of December. During the year, the price followed the interim increase in crude oil prices and reached a high of RMB 9,295 per tonne in June. From the third quarter onwards, falling crude oil prices led to lower prices.
Viscose prices in China recorded a steady increase in the first half of the year, peaking at RMB 15,400 per tonne in June. In the second half of the year, prices came under increasing pressure due to falling demand. In anticipation of further price decreases, yarn spinners held back on purchases and stocks continued to rise. Only after slow reopening steps in China and a reduction in production volumes in December did a slight stabilization emerge. Despite the largely negative price trend in the second half of the year, prices for conventional viscose recorded a 7 percent increase to RMB 12,800 per tonne in the year under review. In 2022, high costs for dissolving wood pulp and chemicals proved to be particularly burdensome for viscose producers that are not backward integrated. In Europe, the increase in production costs was greater than in China due to the significant rise in energy and raw material costs.
Prices for wood-based specialty fibers such as those of the TENCEL™, LENZING™ ECOVERO™ and VEOCEL™ brands reflected a positive trend until the third quarter, but were unable to avoid the negative market trend in the further course of the year.
The Chinese import price for dissolving wood pulp, the key raw material for the production of wood-based cellulosic fibers, was 1 percent below the previous year’s level at USD 900 per tonne as of the end of December. However, due to supply-side issues, the price rose to reach a multi-year high of USD 1,220 per tonne at the end of August. Particularly in the fourth quarter, the price dropped again significantly in an environment of expanding supply and falling demand. Chinese paper pulp prices maintained their high level for a longer period, mainly reflecting ongoing supply shortages. Prices at the end of 2022 were 44 percent higher than a year earlier. The premium for dissolving wood pulp compared to paper pulp touched a long-term low in the year under review.
Staple fiber prices – Development in China*
USD/kg (excl. VAT)
1 Source: IMF, World Economic Outlook, January 2023
2 All production-related figures in this section were updated from the initial estimates published in the Annual Report 2021. Sources: ICAC, IWF, Cotton Outlook, CCFG, FAO
3 Source: ITMF,18th Global Textile Industry Survey, January 2023