Global yarn and fabric diverged in the second quarter, with yarn output achieving a small increase despite higher global stocks, while world fabric production declined, inventories of fabric moved lower in the Americas and Europe, and were unchanged in Asia. Brazil’s impact on the global fabric stock position was again marked, though in contrast to last quarter, Brazillian stocks were drawn down sharply over the period.

World yarn production rose by 0.9% in the second quarter. Asian yarn output increased by 2.6%, and production in South America rose by 0.4%. European and North American production fell by 1.9% and 1.4% respectively. On an annual basis, global yarn output was 6.2% lower, with the Americas responsible for the greater part of the output drop. USA - 21.4%, and Brazil - 9.1%. Asian production was stable year-on-year (-0.1%) while European production fell by 3.8% over the year.

Fabric production weakened in most regions, declining in aggregate by 3.3% over the quarter. On an annual basis, world fabric output moved deeper into negative territory (-8-1%). Stable production in Asia during the quarter (-0.1%) was insufficient to offset quarterly falls in North America and Europe (both-4.3%) and in South America (-6.4%). Compared to the same quarter last year, all regions have reduced fabric output. The sharpest annual decline occurred in the USA (-19.1%), while South American and European output is 5.2% lower. Asian fabric production was 3.6% lower over the year.

Global yarn stocks rose by 1.5% in the second quarter and remained higher on an annual basis (+11.8%). Asian and South American inventories grew by 2.2% and 2.0% respectively, over the quarter, while European yarn stocks moved lower (-1.6%). On an annual basis, Asian inventories rose 15.3%, driven for the second consecutive quarter by a substantial increase in the Indian stock position. South American inventories were 7% higher on year-ago levels, while European stocks were fairly stable (+1.4%).

World fabric stocks reversed their first quarter gain, falling by 6.1% in the subsequent three months. Brazillian inventory levels, which dropped by 23.7% during the quarter were the main driver of the global draw-down. European fabric stocks declined 2.2% and North American inventories were 1.5% lower. The second quarter saw no change in Asian fabric stock levels. On an annual basis, fabric inventories were 1% lower, reflecting falls in Brazil (-19.1%), USA (-3.1%), and Asia (-2.5%). In Europe, by contrast, fabric stock levels were 13.6% higher compared to the second quarter of last year.

European and Brazilian yarn orders were respectively 1.1% and 1.5% lower over the second quarter. Fabric orders declined during the quarter in Europe (- 2.%) and South America (-0.9%). Fabric orders in all regions were negative on an annual basis. (ITMF Press Release)