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What’s Surging & Slowing in the Global Fiber Sector

When the global economy is in flux, the fiber sector doesn’t go unscathed. In fact, experts say the industry is in a state of volatility with considerable ups and downs, significant overcapacity in a number of fiber segments and the backlash from slowing global demand at retail.

Speaking in Austria Friday at the Dornbirn Man-Made Fibers Congress, Andreas W. Engelhardt, owner of The Fiber Year consulting and author of the annual report of the same name, said the fiber market is in need of greater transparency and improvements along the textile value chain.

According to the latest The Fiber Year report, 2016 was the first time the global market size for fibers surpassed a volume of 100 million tons. However, growth slowed to 1.4%, marking the fourth consecutive year of slowing growth.

Synthetic fiber growth is up and cellulosic fibers are enjoying “quite a strong growth,” Engelhardt said. Polyester in particular, however, saw the slowest growth in 80 years, and natural fibers are stagnating.

“By now the man-made fiber markets occupy 70 percent of the global fiber market versus 55 percent some 10 years ago, and this trend, for many, many reasons, will definitely continue for years to come,” Engelhardt said.

Between 2006 and 2016, synthetics occupied 51 percent of the global market share, and now that number is 64 percent.

“We clearly see a global shifting toward man-made fibers while natural fibers, and that is mainly cotton, have lost market share and this trend definitely will continue,” Engelhardt said.

When it comes to cellulosics in particular, things like lyocell, the fibers have seen above average production growth of 6 percent. By comparison, growth in synthetic fibers were up just 1.9% and polyester specifically was up just 1 percent in 2016. Growth in cotton production did increase 8 percent last year, but, as Engelhardt pointed out, “The year before we saw a disastrous cotton harvest, meaning that the global output shrank by some 25 percent, so 8 percent growth is just more or less back to normal levels.”

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A breakdown by country

In the U.S. market, which is very much driven by cotton, Engelhardt explained, man-made fiber output has been on the decline though it has managed to stabilize following the financial crisis. The U.S. produced 5 million tons of staple fibers, a 24 percent surge, as a result of a rebound in cotton.

China lifted its volume of stable fibers by 2 percent to 20 million tons, due only to gains in man-made fibers. In India, output advanced 2 percent to 10 million tons thanks to increases in all categories.

According to Engelhardt, “Bangladesh is fully focused on cotton products, and that in the long run may pose a challenge because we all know cotton products are more expensive than man-made fiber products. But as of today, Bangladesh is not able to supply man-made products…with a little time lag we will see a growing share of man-made fibers in Bangladesh.”

Vietnam, with its recently expanded capacity in anticipation of the Trans-Pacific Partnership, has seen strong increases in cotton yarn, though the country is exporting two-thirds of its yarn, mostly to China, but they are in need of importing two-thirds of their fabric requirements.

“That’s a good example of a missing linkage along the chain,” Engelhardt said. Despite that, though, Vietnam seems to still be riding the wave of TPP interest—despite the trade deal being stalled for some months after the U.S. pulled out of it—and growth in the space is expected to continue. “There’s still a lot of opportunity for investment in Vietnam along the entire chain, not only for fibers and yarns, but also for fabrics.”