Global trends in fibre production, consumption and prices, January-February 2006

22 pages, published in Issue 121, January-February 2006   Report price: Euro 395.00; US$ 520.00

World man-made fibre output continued to rise in 2005 but at a much slower pace. Output was up by only 1.5% to 34.4 mn tons following a 6.5% hike in 2004. Moreover, the 2005 rise was sustained entirely by strong growth in China. Synthetics accounted for most of the increase?and all of the increase in synthetics was due to growth in polyester. But cellulosics were also up, by a healthy 5.3%. Prices of most man-made fibres rose in 2005 as record oil prices led to higher raw material costs, although some fibre prices fell back in early 2006.

Output of natural fibres fell by 4.3% after a 25.2% hike in 2004. The fall was driven by a 4.5% decline in cotton output?following a 26.9% rise in 2004?as growers responded to the drop-off in prices. But the decline in the wool clip levelled off. As a result of these trends, the share of natural fibres fell from 44.9% to 43.5%. The cotton price has recovered slightly from its low point of 48.6 cents/lb in December 2004, breaking through the 60 cents/lb barrier in early 2006. Demand in the 2005/06 season will be up by 2.3%, mostly due to higher usage in China and South Asia, and output will be down by 4.2%, according to the International Cotton Advisory Committee (ICAC). But mill buyers remain resistant to price increases and, with no major changes in supply or demand, prices will remain subdued. According to the ICAC, the cotton price will average 65 cents/lb in 2005/06?13 cents/lb more than in 2004/05. But it will fall back slightly to 62 cents/lb for the 2006/07 season. Wool prices have fallen almost continuously since 2003 due to competition from man-made fibres and concerns over stocks?including those in the textile pipeline. Although the downward trend has bottomed out, there is no prospect of a strong recovery. Global demand is being sustained largely by consumption in China. Elsewhere, demand is being depressed by restructuring in the textile industries of industrialised countries. The outlook is for only a modest rise in prices. Although stocks are expected to fall slightly, the balance between supply and demand is likely to be maintained in 2006/07.

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• Profile of Lenzing: A Leader in Cellulosic Fibres and a Joint Venture Partner in Carbon Fibres, (1st quarter 2007)
• Global trends in fibre production, consumption and prices, March-April 2007, (March-April 2007)
• Global trends in fibre prices, production and consumption, September-October 2006, (September-October 2006)

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