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The TENCEL™ brand is celebrating its 30th year of innovation in the textile industry. Coinciding with the anniversary celebrations, Lenzing’s Commercial Director for Europe, Americas & Turkey, Johannes Stefan, gave a presentation at the Sourcing Journal’s Annual Global Outlook Conference, providing an update on the latest raw materials trends and what they mean for the TENCEL™ brand and the textile industry as a whole. He analyzed the economic and retail environment, and also took a closer look at recent developments in the sector as well as long-term trends.
The global economy entered 2022 in a weaker position than expected, with rising energy prices and supply chain disruptions, which resulted in broad-based inflation. Many countries re-introduced mobility restrictions to fight the COVID-19 omicron variant in the first quarter of the year and new uncertainties emerged, such as the conflict between Ukraine and Russia. Pandemic restrictions are now less prohibitive than before, decoupling demand from fluctuating COVID-19 cases, yet high uncertainty from geopolitical tensions still influences consumer demand and supply chain efficiency. Monthly global apparel and retail sales showed a promising positive growth trajectory across major economies compared to 2019, but with large regional differences.
In the lead up to the pandemic, prices of major textile fibers were steadily declining and hit record lows during the peak of the pandemic. However, because of strong demand recovery in the second half of 2020, fiber prices climbed up. While Cotton prices hit their highest levels since 2011, Viscose fiber prices returned close to their long-year average. Strong demand for sustainable fiber alternatives across all fiber types at times caused “micro-shortages” that were accompanied with higher fiber prices. Price changes of wood-based specialty fibers such as Lyocell and Modal were less pronounced and less volatile, causing the attractiveness of these fibers to increase.
Johannes noted that continued high prices and volatility on commodity markets are expected to remain a challenge for the textile industry. He advised the audience to keep an eye on underlying factors influencing fiber production costs, such as food crops, fertilizers, chemicals and energy. Another factor Johannes mentioned was the high inflation levels in developed economies who have the potential to weigh on consumer demand.
Analyzing long-term fiber trends, Johannes stated that by 2030, the world will need 30 million tons of additional fibers, which is 25% more than today. However, the ability of many fiber types to meet this demand is limited due to factors such as arable land, climate conditions and environmental aspects. To prepare for this future, Johannes highlighted the importance of understanding and accounting for these limitations through careful long-term planning of fibers used in consumer products. “One thing the TENCEL™ brand has learnt over the last 30 years, is that it's very important to have a close exchange between the retail side and the fiber production side. This helps in securing supply and making sure that changes in the market are taken into consideration by all industry players,” Johannes said.
He further added, “To address rising prices, it’s important to extract more value out of the raw materials used in consumer products. With Lenzing’s TENCEL™ and LENZING™ ECOVERO™ brands, we have received a great deal of positive feedback – these offerings enable our partners to better communicate about fiber properties and sustainability to consumers, and thereby increase the value and credibility of their own products.”
Johannes’s full presentation: