By Jim Phillips, Yarn Market Editor

Demand for yarn from U.S. manufacturers continued to be somewhat middling in October, continuing a trend that began earlier in the third quarter.

Spinners and analysts agree that a saturated source-to-retail pipeline is the primary reason for a slowdown. “Retail shelves are full, and mills have an ample inventory of yarns to meet their immediate needs,” said one source.

“There is also some trepidation about where the economy is headed over the next few quarters,” said an analyst. “The Fed continues to try to slow the economy down to limit inflation, but whether its acts can help avoid a full-out recession is still very much in doubt.”

From a consumer spending and confidence standpoint, falling energy prices spiked a surge over the past few months, according to the Consumer Confidence Index, published by The Conference Board®. Also contributing to the increase, according to other sources, were lowering inflation rates over the past several months. However, they warned, recently announced cuts in oil production by OPEC could plunge confidence levels back to mid-year historical lows.

“At this point, it is just wait and see, for both consumers and businesses,” noted one executive. “We’re hoping for a good holiday season that will lead to some robust orders by the start of the year. But if a lot of product is left on the shelves after the holidays, we could be looking at a slower beginning to the year than we would hope. All things considered, if the European situation stabilizes, we could see a lot of things change for the better in a relatively short time. We could expect a drop in inflation, enhanced supply and reduced costs of energy resources, and a continued revitalization of the global supply chain.”

LYCRA Publishes Planet Agenda Update; Announces Bio-Derived Spandex

The LYCRA Company, dedicated to developing sustainable and innovative fiber and technology solutions for the apparel and personal care industries, announced in mid-October the publication of its first annual Planet Agenda Update.

The Planet Agenda Update is named for The LYCRA Company’s sustainability framework that was established in 2008. It has three pillars that touch every aspect of its business: corporate responsibility, product sustainability and manufacturing excellence.

“We believe in transparency and think it’s important to have a clear sustainability roadmap to guide our business into the future — a bold plan that fully supports our customers and stakeholders,” said Julien Born, CEO of The LYCRA Company. “I’m proud of our teams’ work to advance our sustainability efforts.”

“We have a long legacy as an industry leader known for investing in developing sustainable fibers and collaborating across the value chain,” said Jean Hegedus, sustainability director at The LYCRA Company. “As we created our 2030 goals, we researched our customers’ goals to ensure that our goals supported them, which inspired the update’s theme of ‘What moves you…is what moves us.'”

In other news about the company, LYCRA recently announced it has entered into an agreement with Qore® to enable the world’s first large-scale commercial production of bio-derived spandex using QIRA®, the next-generation 1,4-butanediol (BDO), as one of its main ingredients. This will result in 70 percent of the LYCRA fiber content being derived from annually renewable feedstock. This change could potentially reduce the carbon footprint of LYCRA fiber by up to 44 percent versus equivalent product made from fossil-based resources.

“As part of our sustainability goals, we are committed to delivering products that support a more circular economy while helping our apparel and personal care customers reduce their footprint,” Born said Julien Born. “We are especially pleased to collaborate with Qore, a company that shares our vision for innovative, sustainable solutions. Their expertise in operating fermentation processes and understanding of the chemical value chains makes them the ideal partner to help develop a bio-derived LYCRA fiber at commercial scale.

Cotton Conference To Offer Research, Rechnology Updates And More

The 2023 Beltwide Cotton Conferences (BWCC), set for January 10-12 at the New Orleans Marriott in New Orleans will offer attendees updates on the latest research, technology and issues affecting U.S. cotton production and processing.

The BWCC, coordinated by the National Cotton Council, annually brings together university and USDA researchers, regulatory agencies, extension personnel/agents, consultants, and industry sales/support personnel to exchange information about new products and production/processing systems that can be tailored to individual farming operations for maximum efficiency.

October 2022

By Jim Phillips, Yarn Market Editor

After a string of months in which demand for U.S-made yarns remained remarkably high, especially considering inflation rates and a slowing economy, the past few weeks have seen a slight-to-moderate drop in inquiries and orders for a number of spinners.

“I think we’re in a lull — a temporary one, I hope — because the market is currently saturated,” said one source. Added another, “The retail pipeline looks to be full at the moment. Store shelves are generally well stocked, and our customers are hesitant to place new orders until they see how the economy goes. Fingers are crossed at this point that we can avoid a recession, but the odds of that seem to be decreasing day by day. Consumers have already begun to tighten up their pocketbooks.”

In fact, The Expectations Index, part of the Consumer Confidence Index published by The Conference Board®, although recovered slightly in August from July’s nine-year low, still remains below a reading of 80, suggesting recession risks continue. Consumer concern about inflation remains elevated, but has retreated from the high of previous months.

Cotton Prices, Sustainability Practices

Spot quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets measured by the USDA averaged 108.53 cents per pound for the week ending September 15, 2022. The weekly average was up from 90.71 cents reported for the corresponding period a year ago. Daily average quotations ranged from a high of 111.07 cents Monday, September 12 to a low of 106.10 cents Thursday, September 15. Spot transactions reported in the Daily Spot Cotton Quotations for the week ended September 15 totaled 7,467 bales. This compares to 7,613 spot transactions reported the corresponding week a year ago. Total spot transactions for the season were 20,447 bales compared to 24,772 bales during the same period a year ago.

The ICE October settlement price ended the week at 105.24 cents.

In other cotton news, Cotton Incorporated, as part of the USDA Partnership for Climate-Smart Commodities pilot project, is collaborating with industry leaders to focus on increasing the adoption of climate-smart agriculture practices. The project will build markets for climate-smart cotton and provide technical and financial assistance to more than 1,000 U.S. cotton farmers to advance adoption of climate-smart practices on more than one million acres. This will allow the production of more than four million bales of climate-smart cotton over five years.

“The climate-smart cotton program brings together USDA with private industry resources to increase the production and demand for climate-smart cotton that will help the U.S. cotton industry meet the ten-year sustainability goals,” noted Dr. Jesse Daystar, vice president and chief sustainability officer for Cotton Incorporated.

Eastman, Patagonia® Collaborate On T-shirts

Eastman, maker of Naia Renew sustainable fibers and yarns, is collaborating with Patagonia® to offer a limited run of T-shirts made with Naia Renew ES — Eastman’s latest fiber offering made with increased recycled content.

Named for its enhanced sustainability, Naia Renew ES is made with 60 percent recycled content. Unlike other cellulose-based yarns and fibers, this option requires fewer virgin materials to make an environmentally friendly product. Naia Renew ES is made from a combination of 40 percent molecularly recycled waste material, 20 percent recycled cellulose, and 40 percent renewable wood pulp.

The 20 percent recycled cellulose comes from waste materials, textiles waste and non-forest-derived cellulose waste. This innovation is made possible through Eastman’s continuous efforts to collaborate with eco-conscious partners throughout the value chain. For example, the Naia team has partnered with GP Cellulose, a pulp supplier with a focus on sustainability, to integrate renewable forest fibers and non-forest fiber solutions into its feedstock.

The remaining 40 percent recycled content comes from Eastman’s molecular recycling technology that breaks down hard-to-recycle waste materials like plastic packaging and old carpet into fundamental building blocks to produce the acetic acid used to make cellulose acetate yarn and fiber.

September/October 2022

By Jim Phillips, Yarn Market Editor

In the wake of the highest inflation rates in four decades, increasing interest rates and overall uncertainty about the economic and political direction of the country, consumer confidence in the United States declined for the third straight month in July, according to The Conference Board, a non-partisan, non-profit think tank founded in 1916.

The Conference Board Consumer Confidence Index® decreased in July, following a larger decline in June. The Index now stands at 95.7 (1985=100), down 2.7 points from 98.4 in June. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — fell to 141.3 from 147.2 last month.

The Expectations Index — based on consumers’ short-term outlook for income, business and labor market conditions — ticked down to 65.3 from 65.8.

“Consumer confidence fell for a third consecutive month in July,” said Lynn Franco, senior director of Economic Indicators at The Conference Board. “The decrease was driven primarily by a decline in the Present Situation Index — a sign growth has slowed at the start of Q3. The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist.

Concerns about inflation — rising gas and food prices, in particular — continued to weigh on consumers.

“As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July,” Franco continued. “Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”

Fannie Mae Predicts Modest Recession

In Q1 Falling consumer confidence is also reflected in newly revised forecasts from Fannie Mae about the state of the U.S. economy. According to a late July assessment, Fannie Mae’s forecast for real gross domestic product growth (GDP) in 2022 was revised to just 0.1 percent on a Q4/Q4 basis, down from its previous forecast of 1.2 percent growth.

“This was largely driven by recent incoming data revisions pointing to a modest contraction of GDP in the second quarter as decades-high inflation and rising interest rates weigh on consumers and firms,” Fannie Mae said. “While we do not believe a recession has yet begun, economic growth is clearly stagnating alongside high inflation. With the full effects of monetary and fiscal policy tightening still working through the economy, we now expect a modest recession to begin in Q1 2023 as opposed to our previous expectation of it occurring in the latter half 2023. Thus, our forecast for 2023 GDP growth was revised downward to negative 0.4 percent from a previous negative 0.1 percent. We forecast the unemployment rate will rise to around 5.5 percent by the end of 2023 compared to the current level of 3.6 percent.”

Yarn, Fabric Demand Remains Solid — At Least For Now

At this point, demand for fiber, yarn and fabrics has not been affected to a significant degree. Inquiries for cotton remain high, spinners are still operating at whatever capacity staffing will allow.

As NCTO Chairman David Poston said in his recent “State of the Textile Industry” address: “The bottom line is the fundamentals for the U.S. textile industry are sound and a testament to our industry’s resilience in the face of a perfect storm of supply chain disruptions, rising costs and a once-in-a- generation healthcare crisis.

“Based on the growth we are seeing in capital expenditures and strengthened partnerships with our Western Hemisphere partners, the industry is well-positioned to continue adapting to expected disruptions and inflationary pressures and capitalize on opportunities in the year ahead.”

While things are relatively stable for now, discretionary spending is the first to go when consumer confidence falls. “At first, you see a decline in the purchase of big-ticket items — luxuries, cars, appliances and such,” said one analyst. “But, eventually, it trickles down to the point where consumers only buy absolute necessities. None of the predictions we’ve heard to date have yet come to pass. We’re even seeing prices begin to fall at the pump. It is still early enough to avoid a recession this year or early next, but all the right things have to happen at the right times — and quickly.”

July/August 2022

By Jim Phillips, Yarn Market Editor

The U.S. textile industry continues to make considerable strides in sustainable manufacturing.

For example, American & Efird — and its subsequent parent company, Elevate Textiles — has been establishing sustainability goals and publishing reports quantifying how it is achieving those standards for more than half a decade. Unifi, with its REPREVE® line of products, has also taken its place among the global leaders in environmentally friendly manufacturing methods and technology. Glen Raven published its first sustainability report in 2021. And more and more companies are joining the ranks.

“Many in the textile arena — the fiber producers, the yarn makers, the weavers, knitters, dyers and finishers — have achieved some remarkable results in what could be considered a relatively short period of time,” said one university ecology professor. “You used to think of textiles as a ‘dirty’ industry, one that left the air and water polluted. It was not uncommon at all to see once-beautiful rivers near a dyehouse be a different color every day, with no life-sustaining properties. You don’t see that today. Certainly, a bit of that is attributable to regulation, but much of it has been because of the efforts of environmentally responsible companies. Some other industries are following this lead, and, unfortunately, some are still lagging behind.”

U.S. Cotton Trust Approved As International Sustainability Standard

In addition to individual companies, entire segments of the industry are also making considerable headway in sustainability endeavors.

For example, The U.S. Cotton Trust Protocol has been approved as a standard for sustainable cotton by Siegelklarheit, an initiative of the German Federal Government. By helping consumers to better understand environmental and social labels, Siegelklarheit wants to contribute to more sustainable purchasing decisions. U.S. Cotton Trust Protocol successfully passed Siegelklarheit´s assessment system. As a result, members of the Partnership for Sustainable Textiles (PST) can use the Trust Protocol as another standard to calculate their share of sustainable cotton.

The Trust Protocol is the only system that provides quantifiable, verifiable goals and measurement and drives continuous improvement in six key sustainability metrics — land use, soil carbon, water management, soil loss, greenhouse gas emissions, and energy efficiency. It is also the world’s first sustainable cotton fiber system to offer its members article-level supply chain transparency through the Protocol Consumption Management Solution.

“The Trust Protocol’s vision is to set a new standard in sustainable cotton production where full transparency is a reality and continuous improvement to reduce our environmental footprint is the central goal,” said Dr. Gary Adams, president of the U.S. Cotton Trust Protocol. “We commit to ensuring the protection and preservation of the planet, using the most sustainable and responsible techniques.”

Launched in 2020, the U.S. Cotton Trust Protocol was designed to set a new standard in more sustainably grown cotton, ensuring that it contributes to the protection and preservation of the planet, using the most sustainable and responsible techniques.

U.S./Australian Consortium Successfully Diverts Cotton Waste

A 12-month trial on a cotton farm just outside the rural town of Goondiwindi, Queensland, Australia, has shown it is possible to divert large amounts of cotton textile waste at end of life from landfills to cotton fields with no harm done to soil health or cotton yields, according to Cotton Leads, a consortium of the U.S. and Australian cotton industries. Project collaborators are confident that with a solid business plan and more research, returning shredded cotton products to cotton fields could soon offer benefits to soil health, as well as a scalable solution to the massive global problem of textile waste.

“At the very least the trial showed that no harm was done to soil health, with microbial activity slightly increased and at least 2,070kg of Carbon Dioxide equivalents (CO2e) mitigated through the breakdown of these garments in soil rather than landfill,” said Dr. Oliver Knox, cotton-industry-supported soil scientist said. “The trial diverted around two tons of textile waste from landfills with no negative impact on cotton planting, emergence, growth or harvest. Soil carbon levels remained stable, and the soil’s bugs responded well to the added cotton material.”

He continued: “There also appeared to be no adverse effect from dyes and finishes, although more testing is needed on a wider range of chemicals to be absolutely sure of that.”

According to a farmer involved in the testing, the cotton fields easily “swallowed up” the shredded cotton material, giving him confidence that this composting method has practical long-term potential. “We spread the cotton textile waste a few months before cotton planting in June 2021 and by January and the middle of the season the cotton waste had all but disappeared, even at the rate of 50 tons to the hectare,” he said.

July 2022

By Jim Phillips, Yarn Market Editor

The U.S. textile industry was an industrial powerhouse that led the world in style, volume and quality during the middle of the 20th century. Unfortunately, by the early days of the 21st century, the industry has fallen to where it was a shadow of its former glory, ravaged by imports from government-subsidized Asian companies that paid very low wages.

One by one, spinners, weavers and knitters turned the lights off and shut the doors forever. Some experts and analysts predicted the industry had no future and would eventually all but disappear.

Despite all the naysaying, textile leaders were not ready to throw in the towel. Instead, they transitioned from mass production of commodity products to creating specialty, niche and high-tech products. They espoused a new value proposition that refocused the industry’s priorities. No longer would U.S. companies try to compete on volume and price. Instead, they promised to be world’s best in quality, service and speed to market. They realigned manufacturing capacity to more realistically align with demand. And they saw orders, revenue and profits skyrocket. The U.S. industry reclaimed its place among the world’s elite. All was well — at least until news broke of a highly contagious virus that was decimating China and beginning to spread around the world.

The industry hit bottom during the first half of 2020. Plants shut down. People sheltered in place. Stores and restaurants closed. Container ships full of products and supplies
were lined up at ports across the world with no way to unload their cargo.

Perservering

Ever resolute, the industry persevered, and when the economy began to reopen, spinners and their sister companies once again began to recover. Orders improved — some companies even finished 2020 close to their original projections. Yet, even with a decent degree of recovery, things were not quite the same. Many companies had problems keeping qualified employees even before the pandemic began. After the initial quarantine period, many of those who were temporarily laid off decided not to return to work. A shortage of qualified labor, coupled with a global supply chain in disarray, meant customers were not getting their orders as quickly as before.

“Demand remains solid,” said one industry expert. “The problem is getting product to the customers. Between production problems and shipping problems, the time from order to delivery has increased substantially.”

And that negates two of the three U.S. industry’s foundational advantages. Quality is still there. Service and speed to market are not.

So, that leads to the question: what’s next?

A number of consulting companies and analysts have assessed the current state of manufacturing in America, including the textile industry, and have suggested several steps companies can take to solve the current labor problem, as well as prepare for a secure future.

Recommendations

Consulting company Deloitte, for example, has recommended manufacturers need to watch and act upon specific trends to secure their future. Three of those trends apply specifically to spinners and others in the textile industry. In dealing with the workforce shortage, Deloitte recommends finding ways to add flexibility and work/life balance to manufacturing jobs. Many displaced workers became used to a more balanced lifestyle and chose not to return to a more restrictive manufacturing environment.

Logistics challenges, including shortages of truck drivers, dock workers and others, are likely continue — maybe into the first half of 2023. As a result, spinners will likely incur higher costs, which are likely to be passed on through to customers. Companies should carefully plan and map out their supply networks. Deloitte says, “digital supply networks and data analytics can be powerful enablers for more flexible, multitiered responses to disruptions.”

The third applicable trend is sustainability. Deloitte reports: “The fast rise of environmental, social, and governance factors is redefining and elevating sustainability in manufacturing as never before.” This is something at which many spinners excel. Efforts by such companies as Unifi and Elevate Textiles have gained considerable global attention. More and more companies in the industry are undertaking concerted sustainability initiatives.

May/June 2022

By Jim Phillips, Yarn Market Editor

Recent announcements of quarterly sales for U.S. retailers have left analysts reeling, manufacturers stunned and consumers cautious.

While it is still too early to assess whether this heralds a sustained economic slowdown, experts say, there is no doubt the U.S. economy stumbled a bit in Q2 — especially disappointing after a relatively solid first quarter.

As of this writing, retail disappointments have yet to trickle down to yarn spinners, many of whom have been struggling to meet increased demand as a result of diminished resources. “Mills are still running,” said one expert. “Many have a backlog they are trying to get out from under. After that, it will be just wait and see.”

“It’s hard for some spinners, especially smaller ones that aren’t entrenched in a niche market, to turn a profit,” said another industry expert. “They are facing increased prices for energy and raw materials, a reduced labor pool and supply chain issues. They have to raise prices to account for all of this, but they also have to be careful not to price themselves right out of business.”

The analyst continued: “At some point, we were expecting some relief from these issues as the year progressed, but now we are not certain when — or even if — things will return to normal. When you look at the supply chain, for example, even short tangles are hard to fix, much less the global dysfunctionality currently present.”

Yarn spinners and others within the fiber/textile/apparel complex are keeping their fingers crossed that recent sales reports do not take the shine off of what was a mostly positive “State of the Textile Industry” address by NCTO Chairman David Poston.

“We all faced a litany of challenges in 2021, but I am proud to stand here today and say that our industry’s resilience and innovative spirit pulled us through and put us on a path of growth,” Poston told NCTO members at that organization’s annual meeting in early May. “If 2020 was a year marked by an economic downturn and once-in-a-generation pandemic and health crisis, 2021 was defined by a rebound of remarkable proportions in our industry, nearly on par with the performance of pre-pandemic levels in 2019.” Year over year, textile industry shipments, exports and capital expenditures all increased in 2021.

However, in April, households cut back on a number of purchases, leading to flat sales from several retailers. Target was among the first to break the bad news, noting that, for the fiscal quarter ended April 30, the company posted adjusted earnings of $2.19 a share. Analysts expected Target to earn $3.07 a share, on revenue of $24.48 billion. Last year it earned $3.69 a share on sales of $24.2 billion. Other retailers followed with earnings reports below expectations. As a result, the Federal Reserve cut its second-quarter gross domestic product (GDP) growth estimate to a 1.1 percent annualized rate from the previous expectation of 1.6 percent. In the first quarter, the economy grew by 3.2 percent.

The drop in retail sales reflects a corresponding drop in consumer confidence. According to The Conference Board Consumer Confidence Index®, consumer confidence decreased slightly from March.

“Consumer confidence fell slightly in April, after a modest increase in March,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

“… purchasing intentions are down overall from recent levels as interest rates have begun rising. Meanwhile, concerns about inflation retreated from an all-time high in March but remained elevated. Looking ahead, inflation and the war in Ukraine will continue to pose downside risks to confidence and may further curb consumer spending this year.”

Ultimately, those close to industry say that finding a way to curb inflation and restore stability to Europe is likely to go a long way toward getting the global economy back on solid ground.

Unifi Recognizes Sustainability Champions

Unifi Inc., an innovator in recycled and synthetic yarns, announced on May 24 the recipients of its fifth annual REPREVE® Champions of Sustainability awards, which recognize brand, textile and retail partners that have demonstrated a true commitment to supporting a more sustainable world.

“We are thrilled to announce the 2022 Repreve Champions of Sustainability,” said Eddie Ingle, CEO of Unifi. “We applaud the demonstrated commitment to sustainability, which has allowed us to recycle more than 30 billion bottles to date.”

Unifi’s Repreve Champions of Sustainability awards will be presented to 39 brand and retail partners that have transformed 10 million or more recycled plastic bottles and 53 textile partners that have transformed 50 million or more recycled plastic bottles through the use of Repreve performance fibers.

Cone Promotes Mental Health Awareness

Cone Denim® has launched its Mental Health Awareness Selvage Denim in support of Mental Health Awareness Month. This is the newest fabric within the Cone Community Collection, a series of fabrics designed to support various causes and organizations that align with the values of Cone Denim. Cone will donate a portion of sales related to the newest selvage to the Child Mind Institute, a nonprofit dedicated to transforming the lives of children and their families struggling with mental health and learning disorders.

May 2022

By Jim Phillips, Yarn Market Editor

As has been the case for most of the last nine months, demand for domestic yarn, ring-spun and open-end, remains strong. However, labor shortages, supply chain issues and increasing costs continue to constrict production and delivery.

“At the height of the pandemic, when so many places were on lockdown, a lot of people became accustomed to the flexibility of working remotely,” said one analyst. “Now that restrictions have been abolished in most environments, there isn’t nearly as much desire to return to the routine of regular shift work. So, a lot of these people are retraining, acquiring skills that will both provide higher wages and the work/life balance they seek.”

“I have a lot of customers who want yarn,” said a yarn broker. “My problem is finding enough supply to provide for their needs.”

Further exacerbating the issue are the continuing global supply chain issues. “We were hoping to see some relief by now,” said a logistics and transportation expert. “But that is not happening.”

She continued: “Even in normal times, the supply chain is fragile. Once disrupted, it takes some time to heal. This is true with even minor kinks in the system. But Covid and soaring energy prices are far from minor disruptions. Then you add the conflict in Ukraine, and you create an entirely new level of disturbance. And when you have bottlenecks in the supply chain and can no longer freely move components and products across the globe, you create a fertile ground for inflation.”

Most experts predict the global supply chain will continue to be dysfunctional for at least the remainder of the year — and perhaps well into the first quarter of 2023. While there are shortages of available product in many areas, among the most critical are semiconductors, which are necessary for everything from cars, to computers, to manufacturing processes. This is an area in which the Russian invasion of Ukraine has had significant impact. While Ukraine is not an exporter of microchips, it is the world’s leading source of neon, a gas needed for the lasers used in the chip-making process.

Consumer Confidence Increases Slightly In March

Consumer confidence was up slightly in March, despite inflation and global supply-chain issues.

The Consumer Confidence Index®, published monthly by The Conference Board, increased slightly in March, after a decrease in February. The Index now stands at 107.2 (1985=100), up from 105.7 in February. The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — improved to 153.0 from 143.0. However, the Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — declined to 76.6 from 80.8.

“Consumer confidence was up slightly in March after declines in February and January,” said Lynn Franco, senior director of Economic Indicators at The Conference Board. “The Present Situation Index rose substantially, suggesting economic growth continued into late Q1. Expectations, on the other hand, weakened further with consumers citing rising prices, especially at the gas pump, and the war in Ukraine as factors. Meanwhile, purchasing intentions for big-ticket items like automobiles have softened somewhat over the past few months as expectations for interest rates have risen.”

Franco continued: “Nevertheless, consumer confidence continues to be supported by strong employment growth and thus has been holding up remarkably well despite geopolitical uncertainties and expectations for inflation over the next 12 months reaching 7.9 percent—an all-time high. However, these headwinds are expected to persist in the short term and may potentially dampen confidence as well as cool spending further in the months ahead.”

Year-Over-Year, Cotton Prices Continue To Soar

Despite a slight decrease for the week ending April 7, cotton prices continue to be at the highest levels since the early 2010s. Spot for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets measured by the USDA averaged 132.72 cents per pound for the week ending April 7. The weekly average was down from 134.86 cents from the previous week, but up from 74.97 cents reported the corresponding period a year ago. The ICE May settlement price ended the week at 133.20 cents, compared to 135.69 cents the previous week.

April 2022

As the first quarter of 2022 comes to a close, demand for U.S-made ring-spun and open-end yarns remains strong.

“I can sell just about anything I can get my hands on,” said one industry source. “But I can’t get my hands on as much as I need.”
A yarn seller said the open-end market is particularly tight. “Frontier was already selling nearly half of its production to Gildan before it was acquired,” he said. Now the open-end market is very tight. I try to get some ring-spun for my customers when I can, but that is hard to come by, too.”

A Gildan subsidiary purchased Frontier in late 2021. “The market was tight even before the sale,” said a yarn broker. “Now it’s even harder. Everyone is waiting for product supply to loosen up a bit, but who knows when that will be.”

As has been the case for the past several years, multiple factors are contributing to the smaller-than-normal supply of product. The global pandemic caused a disruption in the U.S. workforce, the likes of which have been experienced no more than twice in the past century. It is estimated that some 47 million workers quit their jobs. Many of these people were in food service and other lower-wage positions. In manufacturing alone, the U.S. Chamber of Commerce estimates that about 1.4 million jobs were lost at the beginning of the pandemic. Spinners, fabricators and other manufacturers have since struggled to hire both entry-level and skilled workers.

The causes that resulted in many working forgoing manufacturing were multiple. First, for some lower-income families, the temporary Federal unemployment subsidy provided greater income than their normal wages. When people began rejoining the domestic workforce, they were seeking more flexibility, work/life balance, more money, and better working conditions.

People much prefer such endeavors as transportation, mining and construction, rather than in such areas as spinning, weaving, knitting or finishing, according to data from the U.S. Chamber of Commerce. In fact, the chamber says, there is a surplus of experienced workers in those industries.

Prices Remain High

The combination of high demand, diminished production and other factors have caused a precipitous increase in yarn prices over the past year. It’s not just demand; it is also the high cost for raw materials and energy, as well as a slug-gish global supply chain.

“The cost-per-pound for some yarns has almost doubled since the onset the pandemic,” said one yarn broker. “And until energy prices begin to diminish and supply comes more in line with demand, it’s likely to stay that way.”

As of the week ended March 17, for example, cotton prices remained substantially above 100 cents per pound, with the average for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets measured by the USDA coming it at 117.87 cents per pound. The weekly average was up from 81.98 cents reported during the corresponding week a year ago. Moreover, the price was up from 47.55 cents per pound in April 2020, shortly after the beginning of the pandemic.

The USDA reported multiple inquiries from spinners for later in the year but noted that most companies had already covered their raw cotton needs for the summer.

Supply Chain Issues Still Abound

As frequently reported over the past 18 months, the lack of a robust supply chain remains a major contributor to lack of domestic product availability. As a result, textile and apparel imports increased by more than 25 percent in 2021.

“I don’t see things improving on the supply-chain front this year — and maybe not until well into 2023,” said a logistics analyst. “I think what you are going to see, at least for the short-to-mid-term, is that suppliers will be moving closer to their customers. That should at least somewhat ease the pressure on manufacturers.”

The instability of the domestic supply chain is of some concern for domestic spinners, who count on partners in the West for a significant portion of orders. “The ability to get top-quality product to our Western Hemisphere customers faster than anyone else has always been a competitive advantage for U.S. companies,” said a source with multi-national contacts. “Our hope is that, when the world returns to normal, if there ever will be such a thing, so will the advantages the U.S. has enjoyed over the years.”

March/April 2022

By Jim Phillips, Yarn Market Editor

Despite soaring raw materials prices, product demand from U.S. yarn spinners remains relatively strong. As has been the case since the economy began to reopen after the first COVID-19 wave, the primary issue has been timely product delivery as a result of a shortage of qualified labor and a muddled supply chain.

However, soaring prices for cotton and petroleum, as well as a general escalation in energy costs, continue to put pressure on margins for many spinners.

The per-pound price for cotton is at levels not seen for nearly a decade. As of the week ending February 10, spot quotations for the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, and uniformity 81.0-81.9) in the seven designated markets measured by the U.S.Department of Agriculture averaged 122.37 cents per pound. This was slightly down from the previous week, but substantially up from the 81.08 cents reported during the corresponding period a year ago. The ICE March settlement price ended the week at 125.66 cents.

Before the recent surge in prices, the last time cotton exceeded $1.20 per pound was in the first half of 2011. In 2010, cotton exceeded $2.00 per pound for a short period of time.

For petroleum, the crude oil price per barrel was just shy of $94.00 on February 14. This compares to just $20.67 as recently as August 2020.

“Margins throughout the yarn industry have always been on the thin side,” said a research analyst. “The escalating costs across the board put tremendous pressure on spinners. Their customers are facing pricing and sales pressures of their own, so they often push back on large price increases. So, the spinners are caught in the middle. They have to be more efficient and effective. They need to turn product around quickly. And they need to get product to customers as promised — a much more difficult proposition today when the supply chain is still somewhat scrambled.”

COMPETES Act Passes House, But Faces Senate Resistance

The U.S. House of Representatives in late January passed the America COMPETES Act, a legislative package that will help close the de minimis loophole on duty-free imports from China and also renew the Miscellaneous Tariff Bill (MTB), both important provisions to U.S. textile manufacturers, according the National Council of Textile Organizations (NCTO).

Another important provision in the legislation, NCTO says, is that it renews the MTB for two years, which would extend limited tariff relief on a range of manufacturing inputs used by U.S. textile producers.

“We commend the House for passing this sweeping legislation, which contains several critical trade provisions beneficial to American manufacturers,” said NCTO President and CEO Kim Glas. “This legislation contains a provision that would effectively prohibit China from exploiting the Section 321 de minimis mechanism in U.S. trade law, a win for U.S. textile producers and workers.”

Despite the action in the House, the act faces some stiff opposition in the Senate. The next step is to reconcile the bill with its Senate sibling, the U.S. Innovation and Competition Act of 2021, which was passed in June with the support of 19 Republicans. But those same GOP senators say changes will have to be made to the House bill if there is any chance of passage in the Senate.

A number of Republican senators say the House strayed from the bipartisan language of the Senate bill. “Throughout our nation’s history, Republicans and Democrats have worked together on critical national security issues,” said Senator Todd Young (R-Ind.) “In that tradition, last year the Senate followed regular order and an open process to pass the U.S. Innovation and Competition Act (USICA) with strong bipartisan support. I am disappointed that the House did not follow a similar process. To outgrow, out-innovate, and out-compete China, we need to work together and take the fight to the Chinese Communist Party.

“As we head to a conference process, my hope is that the final legislation will reflect the Senate bill and give House Republicans a much better option to support. The Senate-passed bill focuses on directly confronting China, and getting legislation like USICA across the finish line will ensure the United States leads the world into the future,” Senator Young said.

January/February 2022

Yarn demand remains strong across the board, with many spinners, depending upon labor availability, operating at or near capacity.

“The biggest problem remains available human resources,” said one executive. “Even before COVID, many plants were struggling to fill positions. Essentially, it’s been one thing after another, from shutdowns, to enhanced unemployment benefits, to, now, the highly contagious Omicron variant of the disease, which is causing a lot of absenteeism.”

The good news, according to scientists and medical experts, is that the new variant, while more contagious, generally produces less severe symptoms. Also, countries, such as South Africa, that first reported a meteoric rise in Omicron, are now reporting the variant is subsiding just as quickly.

Since the beginning of the pandemic, governmental leaders, scientists, health officials and companies have worked diligently to ensure that, should such a situation develop in the future, nations will not be caught short-handed in their ability to protect their citizens. At the beginning of the COVID-19 pandemic, protective medical gear is such short supply that even critical first-line healthcare workers were not adequately protected.

Medical Textiles Production To Increase

NCTO worked with the U.S. government to ensure the future onshoring of personal protective equipment (PPE) manufacturing. Now, it seems, the rest of the world is on board in increasing overall medical textiles production. According to a new study by market research company Technavio, the medical textiles industry is expected to increase by $3.36 billion from 2020 to 2025. That accounts for a compound annual growth rate of more than 5 percent.

As the study indicates, medical textiles include PPE and a wide range of other products. Nonwoven medical textiles are utilized in items such as absorbent pads, incontinence products, and patient and staff attire. Baby diapers, bed linen, blankets burn dressings, gowns, disposable underwear, dressings, medicine delivery devices, face masks, filter media, nasal strips, pillows, shoe covers, sponges, sutures, tissue scaffolds, towels, wraps, and other products include these substances.

Natural and synthetic fibers are employed in the production of nonwoven medical textiles. Wood-pulp, cotton, and rayon are examples of natural fibers used in non-woven medical textiles. Wood pulp is used because of its obvious absorbency, mass, and low cost, whereas cotton and rayon are soft enough to be used on wounds directly.

Taking Care Of The Environment And People

Last month, it was reported that, Unifi Inc. — among the textile industry’s leading innovators in recycling and sustainability — has now transformed more than 30 billion post-consumer plastic bottles into its REPREVE® brand recycled performance fibers that are used by hundreds of the world’s leading brands. In addition to Unifi, a number of other companies are undertaking far-reaching sustainability initiatives. For example, Elevate Textiles, a global provider of advanced, high-quality products and mission critical textile solutions, recently became the first global textile manufacturer to receive validation of its Science Based Target (SBTi) goals related to reducing greenhouse gas emissions at the highest recommended levels.

As part of its commitment, Elevate recently increased its original greenhouse gas emission reduction target from 2.5 percent to 4.2 percent per year across its portfolio brands of American & Efird (A&E), Burlington, Cone Denim, Gütermann and Safety Components.

Not only are companies in the industry investing in maintain a cleaner, sustainable environment, but they are also working to help better their communities in other ways. Standard Textile Co. Inc., which serves the healthcare and hospitality textile markets, announced on January 18 a national program to combat homelessness. Through partnership with non-profit organizations across the United States that provide mobile shower services to people dealing with homelessness or insufficient housing, the company met its goal of supporting 80,000 showers by the end of 2021.

“On any given day, more than a half million Americans experiencing homelessness may not have regular access to basic essentials many of us take for granted, including a shower or a soft towel. A shower can do so much more than offer personal hygiene; it can restore dignity, something everyone deserves,” said Gary Heiman, Standard Textile’s President and CEO.

Fiber Industries Expands

Fiber Industries in mid-January announced plans to expand operations in Darlington County, S.C. The company’s more than $30 million investment will create 50-plus new jobs.

A full-service manufacturer, Fiber Industries produces polyester staple fiber for high-end performance fabrics, workwear, knit goods, the automotive industry and more.

Currently employing more than 300 people, Fiber Industries’ expansion includes increased capacity through the restoration and modernization of production lines. The company will also use the additional investment to install state-of-the-art control systems and increase warehouse space.

The expansion project is expected to be completed in early 2023.

“We are excited about the continuing growth of our facility which is now even better positioned to serve the needs of the American textile industry,” said Fiber Industries CEO Don Bockoven. “We also are proud to be part of the wider effort to reshore jobs and bring textile manufacturing back to the USA. We thank the state of South Carolina as well as Darlington County for their unwavering support.”

January 2022