According to the International Textile Manufacturers FederationΆs (ITMF) State of the Trade Report for Q2 2012, the outlook for global fabric production looks brighter in the second half of the year than it was in Q2.
Output of global yarn production rose in Q2 2012 in comparison to Q1 due to higher output in Asia, Europe and South America. Production in North America was reduced. Traditionally, AsiaΆs production is significantly higher in the second quarter compared to the first quarter as a result of fewer working days in China in Q1 due to the Chinese New Year holidays. Global yarn production in Q2 2012 rose in all regions other than North America.
In Q2 2012, global yarn stocks rose slightly over Q1 mainly due to somewhat higher stocks in China, but plummeted significantly on an annual basis – especially in Asia and South America – while they remained almost unchanged in Europe. Yarn orders were up in Europe but down in Brazil comparing to the prior quarter. On an annual basis, yarn orders were up strongly in Brazil and remained almost unchanged in Europe.
World fabric production increased in Q2 2012 due to higher output in South America, Europe and Asia. Year-on-year global fabric production was down because while it increased in Europe, it decreased both in Asia and South America. Global fabric stocks fell slightly in comparison to Q1 2012 as a consequence of lower inventories in North America, South America and Europe, while they remained practically unchanged in Asia.
Year-on-year fabric stocks rose due to higher stocks in South America and Asia, despite lower stocks in North America and Europe. Fabric orders in Brazil increased in Q2 2012 compared to the previous quarter and jumped year-on-year. In Europe, they were level as compared to the previous quarter but down on an annual basis.
Q3 Looks Good for both Yarn and Fabric
The estimates for global yarn and fabric production in Q3 2012 compared to Q2 are positive. As far as yarn production is concerned, Asia, North and South America are expecting an increase in output, although estimates for Europe are negative. In addition, global fabric production is expected to expand in Q3 2012 as a result of higher output in all regions other than Europe. The outlook for Q4 2012 remains stable both for global yarn and fabric production. Region-wise, only in Europe is fabric production expected to fall further.
In comparison with the previous quarter, world yarn output rose 7.4% in Q2 2012 as the result of high production in Asia (8.1%), especially in China (9.5%), largely due to the fact there are fewer working days in Q1 because of the Chinese New Year holidays.
Nevertheless, output rose in Chinese Taipei (6.7%), India (4.5%), Japan (2.3%), and Korea (0.3%), while decreasing in Pakistan (1.2%). Q2 2012 yarn production increased 2.9% and 1.4% respectively in Europe and South America, but yarn output fell significantly in North America (7.7%). Year-on-year global yarn production rose 7.7%, with output up in South America (20.8%), Europe (12.4%) and Asia (7.6%) and decreasing in North America (12.1%).
Compared with the previous quarter, global fabric production rose 3.5% in Q2 2012 as a consequence of higher output in South America (7.1%), Europe (5%) and Asia (3.1%) – especially China, which recorded a 4.7% increase in output. In comparison to Q2 2011, world fabric production was down 2.7%, with Asia and South America reporting decreases of 3.2% and 2.1%, respectively. Europe, on the other hand, saw a 1% increase in output on an annual basis.
Global yarn inventories rose by 0.9% in Q2 2012 compared to the previous quarter, with Asia (1.5%) and Europe (0.1%) recording higher inventories, although stocks fell in South America (2.4%). On an annual basis, global yarn stocks dropped 21.5%, a consequence of lower stocks in Asia (30.4%) and South America (23.6%), and despite slightly higher stocks in Europe (0.1%).
Global fabric stocks fell 0.9% due to lower inventories in North America (4.4%), South America (1.3%) and Europe (0.9%), while inventories in Asia remained practically unchanged (up 0.1%). Year-on-year, global fabric inventories increased 4.5%, mainly due to soaring fabric stocks in South America (20.9%). Fabric stocks in Asia rose only slightly (0.1%), while Europe and North America recorded lower fabric stocks (0.7% and 6.6%, respectively).
Yarn orders in Europe were up 0.9% in Q2 2012 compared to the previous quarter but were down 3.6% in Brazil. Year-on-year yarn orders rose in Europe and Brazil by 0.3% and 23.1%, respectively. Fabric orders were unchanged in Europe in Q2 2012 compared to Q1, but were up in Brazil (6.9%). On an annual basis, fabric orders fell 2.6% in Europe and jumped 20% in Brazil.
