The International Textile Manufacturers Federation said the relatively stable third quarter 2017 global market for yarn and fabric production is expected to show a deeper contraction in the fourth quarter.
ITMF reported that global yarn production decreased 0.4% in the third quarter from the previous three months and was 2.4% lower than a year-ago-period. An output reduction of 3 percent in Europe and 0.5% in Asia, were somewhat balanced by increases of 0.5% in Africa, 4.8% in the U.S. and 6.5% in Brazil.
“This downward trend is expected to be observed in the fourth quarter due to negative forecasts in the Asian market,” according to ITMF.
Global yarn stock declines ranged from 0.3% to 6% in all regions in the third quarter except in Europe, where stocks increased 10 percent. Altogether, yarn stocks reached 105 percent of the previous year’s level.
Global yarn orders fell 2.7% around the world from the second quarter to the three months through September, as a result of a 14 percent increase in South Korea, a stable European market and decreases of 2.5% decreases in Egypt and 11.7% in Brazil.
Compared to the previous three months, global fabric production declined 0.6% in the third quarter, reflecting a 10.7% improvement in Brazil, stable conditions in the U.S. and a reductions of 0.9% in Asia, 3.1% in Europe and 7.6% in Africa.
Negative forecasts in all regions should lower this level in the fourth quarter, ITMF said. Global fabric stocks showed a positive trend in all regions in the third quarter, except for a 9 percent drop in Egypt. Overall, global fabric stocks increased 0.5% in the period.
“A significant positive change of 18.4% in stocks has been observed in Brazil,” according to ITMF. “This trend has been setting in for the third consecutive quarter. While conditions are relatively stable in Asia and the USA, Europe shows slow but constant positive changes.”
Global fabric orders improved in the quarter, with a 18.3% improvement in Brazil counterbalancing reductions of 1.2% in Europe and 2.6% in Africa. This brought the global index up 12.7 compared to the second quarter, ITMF noted.
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