The effects of the Covid-19-related production slowdown or even stoppage are being felt with a delay around of the world. Textile companies, which supply many industries from apparel to automotive to medical, are experiencing price increases and delays that are impacting the entire supply chain. Due to the shortage of materials and a strong recovery in demand, the prices of linen, cotton and polyester have risen by more than 30% in the last five months. In addition, the maritime transport, strongly destabilized, has seen freight prices soar by a factor of 5, which adds to these difficulties. Companies are forced to accept the tariff conditions or else they will stop their production and will not be able to fulfill their customers’ orders. A return to normal is expected between the end of May and September 2021 depending on the activity.
Shortage of raw materials and rising prices
During the first containment, while production activity was at a standstill in China, the main supplier of materials in Europe, French textile companies drew on their stocks and reduced their supplies. The effect of the drop in activity was therefore felt with a delay.
The recovery in France and Europe came after a very strong upturn in demand in Asia and the United States. These increased needs accelerated the pressure on raw materials, even though China increased its production capacity at the end of 2020. This has resulted in a shortage and a rise in material costs. The prices of responsible materials, especially natural materials, subject to the vagaries and periods of harvest, have literally exploded. These consequences are generalized and observed for other materials such as wood, steel or plastics, and contribute to an increase in the price of consumables.
The increases noted are for one year unless otherwise stated.
Acrylic + 60 to 70%.
Polyester +50% to +80
Recycled polyester + 60%.
Tight market. Recycled polyester is used both in the clothing industry and in technical markets such as automotive. Supply shortages exist.
Polyamides and polypropylenes up to +100%.
Massive price increase linked to the rise in oil prices. Repercussion on the prices of meltblown which enters the manufacture of masks and on technical textiles.
Cotton + 35% in 5 months
A permanent increase in cotton prices is expected until September 2021 (new harvest period).
Organic and GOTS cotton + 100%.
Demand has risen sharply while available quantities remain limited.
Prices have been recovering since September 2020 after 3 years of strong decline.
Linen +25% since September
Tight market. Demand has increased in recent years due to the interest in made-in-France and sustainable materials. Supply is currently reduced due to a 2020 harvest with a lower yield than in previous years.
The increase in delivery costs has led to an additional increase of 0.18€ /kg and supply difficulties continue. The price of dyeing additives fluctuates a lot, however, some of them show unprecedented levels of increase (CO2 20%, acetic acid 80%).
Significant increases in the prices of additives, primers, glues, polyesters and polyurethanes from 5 to 11% (polyurethane foam + 20%) generating significant additional costs. Lead times have increased from 3 weeks to 3 months for certain materials.
Other materials essential to the activity
Prices of packaging and supplies are no longer fixed and have risen by up to 20%.
Container shortages and rising freight rates
Maritime transport has been severely affected by the pandemic. The disruption of ports of call is causing prices and supply delays to soar. Imports from Asia surged in 2020 due to orders for masks and then renewed purchases and supply of raw materials, while exports slowed. As demand for containers from Asia surged, ships piled up in western ports, unloading times lengthened and freight prices soared from $1,800 to $8,000.
Impact on prices and lead times
The increase in transportation costs results in a price premium of approximately 2% across all activities and materials.
Increased yarn and fabric prices
These price increases are reflected differently depending on the stage of textile production. If the price of yarns can increase up to 20%, the price of organic cotton yarns increases by more than 40%.
Concerning fabrics used in clothing or technical textiles, the increase varies up to 8% for synthetic materials, 15% for cotton and 20% for linen.