20 January 2016
Textile fibers have resisted the overall decline of commodity prices in the first days and weeks of the new year, with however differences depending on products. We below provide our in-depth analysis of this new period and the reasons behind such unusual stability. No less than 19 products are covered with not only cotton, polyester or viscose, but also a large number of fiber prices being available over a daily basis through our csv file. This report is only available to paying subscribers.
After experiencing a significant decline in 2015, textile fiber prices have stabilized for a while.
By contrast with a sharp decline of commodity and equity markets all over the world, cotton, polyester and other textile fibers have very slightly dropped in the first days and weeks of the new year.
Cotton prices have been supported by an expected fall of global production this year.
Polyester prices have ignored the dramatic decrease of crude oil prices and the consecutive panic selling on most commodity markets.
As other products, the textile fibers are however directly hit by the slowing down economic growth in China.
The textile industry is one of the most negatively affected by the current deceleration of the Chinese manufacturing sector.
In addition to current difficulties experienced by most industrial activities, the clothing industry is confronted with a devastating surge of the labour costs in the country.
Demand for textile products is therefore depressed, in line with the decline of apparel exports and slowing down retail sales at China's clothing stores.
Synthetic fiber prices should also be affected by the drop in commodity prices, which is partly due to the end of a so-called super-cycle on the global commodity markets, after the US Federal Reserve Board stopped creating large quantities of money which had previously fueled speculation on the commodity markets.
Polyester prices have actually plunged in the last year, now reaching historical low levels, and explaining why they are not further dropping.
The current fall of commodity prices is also due to excess supply in China and elsewhere, after capacities have been dramatically expanded over the last ten years.
The current restructuring of the China's manufacturing sector could however reduce capacities, especially where the state do not support companies in order to avoid their bankruptcy and consecutive layoffs.
The first week after Chinese holidays, from mid-February, will tell if textile commodity prices will remain stable or will further fall to unusual and even never seen levels.
More data are available in our Price Database (daily and historical series):