The Rupp Report: Global Rise In Yarn And Fabric Production

The global textile industry is enjoying a strong recovery, in both yarn and fabric production.
Soaring cotton prices give an additional kick to the international market situation. In the last
few months, the Rupp Report has received a lot of positive feedback for its information about the
latest news from the cotton front; and it will continue to publish all kinds of news – most
preferably, good news.

During the last three weeks, many European textile machinery suppliers also confirmed in
face-to-face interviews that they are enjoying a much better order income than in the previous
year. With a twinkle in their eyes, some of them announced that ITMA Europe 2011 is still very
important. In other words, this means the global textile industry can expect some new machinery
developments in Barcelona, Spain.

Another Confirmation

The latest statistical confirmation for good news, that is, the upswing of the global textile
industry, comes from the International Textile Manufacturers Federation (ITMF), Switzerland. In its
most recent state of trade report, for the second quarter of 2010, ITMF reports:

“The strong global recovery in yarn and fabric production since their recent lows in the 1st
quarter of 2009 continued also into the 2nd quarter of 2010. Both global yarn and fabric production
rose significantly compared to the 1st quarter of 2010 as well as to last year’s 2nd quarter.
Output increases of yarns and fabrics could be observed in all regions. Asia’s increases in the 2nd
quarter are influenced especially by China’s increases which are somewhat overstated since
production in China in the 1st quarter is traditionally lower compared to the other ones as a
result of fewer working days due to Chinese New Year. Global yarn and fabric stocks were slightly
up in the 2nd quarter of 2010 as compared to the previous quarter. As compared to the 2nd quarter
of 2009 yarn stocks worldwide fell slightly as a result of lower stocks in Asia and Europe while
global inventories of fabrics jumped strongly mainly due to higher inventories in South America and
Asia that offset drops in Europe and North America. Yarn and fabric orders increased both in Europe
and South America in comparison to both the previous quarter and last year. On the other hand yarn
and fabric orders in Brazil fell significantly compared to the previous quarter. In comparison to
last year’s 2nd quarter, yarn orders in Brazil were down while fabric orders were up.

“World yarn production jumped by +18.6% in the 2nd quarter in comparison to the 1st quarter
of 2010. To this significant increase all regions contributed, especially Asia (+19.8%), South
America (+10.1%), Europe (+5.3%) and North America (+4.7%). In comparison to last year’s quarter
all regions still recorded higher output levels. With a jump of +21.9%, especially South America’s
yarn production surged impressively. But also Europe (+20.3%), Asia (+11.1%) and North America
(+4.7%) experienced higher output levels.

“Worldwide fabric production in the 2nd quarter of 2010 also jumped by +16.2%. All regions
recorded higher output levels, especially Asia (+17.5%), South America (+11.2%) but also Europe
(+7.1%) and North America (+6.9%). Global fabric production increased year-on-year by +10.4%. Only
North America’s fabric production declined during this period by -4.4%, whereas the other regions
recorded higher output levels. Fabric production in Europe was up by +24.4%, South America’s by
+14.5% and Asia’s by +9.3%.

“World yarn inventories rose slightly in the 2nd quarter of 2010 by +1.4%. In South America
they soared by +40.0% and remained almost unchanged in Europe (+0.3%) but fell slightly in Asia
(-0.8%). On an annual basis world yarn stocks were down by -0.3% as inventories dropped in Europe
and Asia by -4.0% and -0.7%, respectively. South America’s yarn inventories were up by +13.4%.

“Fabric stocks were up by +1.5% globally in the 2nd quarter of 2010 with Asia, North America
and Europe recording increases of +2.4%, +0.8% and +0.7%, respectively. Only in South America
fabric stocks fell slightly by -0.5%. In comparison to last year’s 2nd quarter global fabric
inventories skyrocketed in South America and Asia by +45.2% and +19.8%, respectively, while fabric
stocks in North America and Europe dropped by -9.9% and -0.2%, respectively.

“In the 2nd quarter of 2010 yarn and fabric orders in Europe rose slightly by +0.6% and
+1.0%, respectively. On the other hand, yarn and fabric orders in Brazil dropped by -13.4% and
-4.4%, respectively. On an annual basis yarn and fabric orders in Europe were up by +8.6% and
+11.4%, respectively. In Brazil yarn orders fell by -3.1%, but fabric orders were up by +5.4%.”

December 7, 2010