From the Sector

Cotton Incorporated published its monthly economic letter of August and shared new insights of the cotton prices:

Cotton prices continue to be caught between the two competing storylines that have been in play for the past several months.
On one side, there is the deteriorating global macroeconomic situation.  The International Monetary Fund (IMF) lowered its projection for global economic growth in both 2022 (3.2%) and 2023 (2.9%) in the updates released in late July.  Current IMF forecasts are significantly beneath those from January (called for 4.4% growth in 2022 and 3.8% growth in 2023) and April (called for 3.6% growth in 2022 and 3.6% growth in 2023).  The evolution in the macroeconomy was a likely factor contributing to the shift in investors’ outlook on the commodity sector, which led to a collapse in prices for cotton and a range of other commodities in June and July.

Beyond the weakening macroeconomic environment, there also may be factors associated with cotton supply chains that could affect demand during the 2022/23 crop year.  Downstream consumer markets for cotton can be viewed as more discretionary than other spending categories, such as food, energy, and lodging, that experienced some of the sharpest effects of inflation.  Given price increases for necessities, consumers may have less income to devote to apparel and home furnishings.

In the U.S., consumer spending on clothing has been flat for the past year.  However, it has been holding at levels that are 25% higher than they were in 2019.  If U.S. consumers pull back on clothing purchases, it may hit the market just as retailers have caught up with consumer demand after the onset of the shipping crisis.  In weight volume, the cotton contained in U.S. apparel imports was up 22% year-over-year in the first half of 2022.  Relative to 2019 (pre-COVID and pre-shipping crisis), the volume in the first half of 2022 was up 23%.  Given strong import volumes, if there is a dip in consumer demand, inventory could build both at retail and upstream in supply chains.  This could lead to cancelations, potentially all the way back to the fiber level, where contracts signed at prices higher than current values could be particularly susceptible.

Tight U.S. supply is on the other side of price direction arguments.  Cotton is drought tolerant, and that is why it can be viably grown in perennially dry locations like West Texas.  However, cotton requires some moisture to germinate and generate healthy yields.  West Texas has had very little rain over the past year, and drought conditions have been extreme.  As a result, abandonment is forecast to be widespread.  It remains to be seen exactly how small the U.S. crop will be, but the current USDA forecast predicts only 12.6 million bales in 2022/23 (-5.0 million fewer bales than in 2021/22).

Meanwhile, demand for U.S. cotton has been relatively consistent, near 18 million bales over the past five crop years (an average of 15.5 million bales of exports and 2.7 million bales of domestic mill-use).  A harvest of only 12.6 million falls well short of the recent average for exports alone, and U.S. stocks were near multi-decade lows coming into 2022/23.  All these statistics suggest shipments from the world’s largest exporter may have to be rationed in 2022/23.  If cotton is not readily available from other sources, the scarcity of supply from the U.S. could support prices globally.

Simultaneously, there is weakness from the demand side.  The market has struggled to find the balance between the weakened demand environment and limited exportable supply in recent months.  The conflict between these two influences makes it difficult to discern a clear direction for prices and suggests continued volatility.

• Opportunity to rebalance trade relations and promote a global sustainable textile industry

Today’s trade relations between the EU and India in textiles and clothing are characterised by a large and systemic trade deficit for the EU; annual imports from India exceed €6 bln (2021) – making it the 4th supplier – while EU exports to India reached just half a billion – the 20th place in our export markets.

Against this background, the free trade negotiations are an opportunity to rebalance that relationship; European textile and clothing companies can offer high quality and innovative products for the Indian market, but they can also offer solutions to reduce the environmental footprint of the textile industry.

EURATEX, as the voice of textiles and apparel manufacturers in Europe, supports an ambitious EU trade agenda, that puts reciprocity, transparency, fair competition and equal rules at the centre of its action. The FTA is an opportunity to establish a more sustainable and fair trading system, based on rules, global environmental and social standards, which are effectively respected by all.

In this context, EURATEX highlights that the sector needs open and efficient markets, but combined with effective controls where necessary, thus ensuring level playing field for European companies. It is clearly essential that the same level of market access to India – both in terms of tariff and non-tariff barriers – is available to EU producers as vice versa.

India today benefits from reduced customs duties due to GSP. For European companies instead, market access to India is challenging, facing non-tariff barriers (related to proof of origin, quality control procedures, etc.) as well as national or state-level support programmes which distort the level playing field between EU and Indian companies.

That level playing field should also apply to our sustainability targets. As the EU will roll out its EU Textile Strategy, setting ambitious standards and restrictions (e.g. on chemicals), we must ensure the FTA is fully aligned with that strategy.

Director General Dirk Vantyghem commented: “We look to these negotiations with great interest. The FTA is an opportunity to develop a shared ambition between the European and Indian industry to make sustainable textiles the norm, and to create a regulatory framework where our companies can compete in a free and fair environment.”

According to the World Health Organization (WHO), cardiovascular disease is one of the most common natural causes of death. Every year, it is the cause of death of around 17 million people worldwide. The Peter Dornier Foundation Prize 2022 has now awarded a research work that is to improve the medical care of people with insufficient heart valve function in the future and prolong the patients' lives.

The human heart is a high-performance machine: over the course of a person's life, it beats almost three billion times, pumping around 200 million litres of blood through the body. Enormous stresses that can sometimes lead to life-threatening signs of wear and tear. If a heart valve gets out of step, patients usually get artificial-mechanical or biological valves as a replacement. However, mechanical solutions imply patients to take blood-thinning medication for the rest of their lives. In addition, there may be audible closing noises. For example, almost a quarter of patients with mechanical heart valves complain of sleep disturbances. Biological heart valves, on the other hand, such as those made from animal tissue, require a great deal of manual work and have a shorter lifetime.

Potential of weaving for medical products demonstrated
For this reason, Graduate Engineer Mathis Bruns at the Institute for Textile Machinery and High-Performance Textile Materials Technology (ITM) at the TU Dresden is researching an implant alternative made of fabric. As part of a research project that also involved heart surgeons from the Dresden Heart Centre and the University Hospital in Würzburg, Mr. Bruns provided important findings for weaving an artificial heart valve in his diploma thesis. For his work entitled "Development of tubular structures with integrated valve function", Mathis Bruns has now received the Peter Dornier Foundation Prize 2022, endowed with 5,000 euros. In his laudation, Dr. Adnan Wahhoud, former head of the development department of air-jet weaving machines at DORNIER in Lindau, said: "With his work, the winner of the award demonstrates very clearly the potential of weaving technology to produce fabrics of complex form, geometry and structure with the aim of prolonging and improving people's lives." The award-winning thesis enriches research into three-dimensional tissues for use in medicine.

Weaving replacement heart valves without seams
"A particular advantage of our approach is the integral production method", says foundation prize winner Mathis Bruns. “The geometry and function of a heart valve is that complex that woven heart valves could not be produced in this form previously. Through the combined use of a rigid rapier weaving machine with bobbin shield and a Jacquard machine, it is possible to weave the replacement heart valve in such a way that it no longer has be sewn together. Even the tubular structures for the blood vessels and the integrated valve function are ‘all of one piece’. Seams are always a weak point in textile medical products," Mr. Bruns adds. “Another advantage of the woven heart valve is the possibility to insert it by the help of minimally invasive surgery. Hence, the folded valve which is about the size of a tea light is to be pushed with a catheter via the bloodstream to the target position in the heart and unfolded there. The patient's chest and heart would then no longer have to be cut open”, explains prize winner Mr. Bruns.

Textile structure is similar to human tissue
A wide variety of medical products have always been produced on DORNIER weaving machines. Customers use them to produce fabrics for bandages, prostheses, blood filters and orthoses among other things. For Mathis Bruns, it is only evident that implants such as heart valves will more and more be woven on the machines from Lindau in the future. "Textile tissue is very similar to human tissue," he says. The human body consists largely of thread-like materials, just as a textile fabric is made up of thousands of individual threads. "Muscle fibres convey force impulses, nerve tracts send stimuli such as pain and brain cells convey information via thread-like dendrites and axons." Because of their ‘thread-like properties’, woven implants are therefore particularly suitable for medical applications.

• China Penalty Tariffs on Finished Textiles & Apparel Give U.S. Companies a Chance to Compete and are a Powerful Trade-Negotiation Tool, NCTO Tells U.S. International Trade Commission

Section 301 penalty tariffs on finished Chinese textile and apparel imports give American manufacturers a chance to compete and provide trade officials with an essential trade negotiation tool, the National Council of Textile Organizations (NCTO) told a key government panel today in a formal written submission. Removing them, the association said, would reward China, put U.S. manufacturers at a competitive disadvantage and do nothing to reduce inflation.

Those were among the key points outlined by NCTO President and CEO Kim Glas in a written testimony submitted to the U.S. International Trade Commission during three days of hearings on the economic impact of Section 301 China tariffs and Section 232 steel tariffs on U.S. industries.

The 301 penalty tariffs should be maintained “absent substantive improvements in China’s pervasive, predatory trade practices,” Glas said in her testimony.  China’s illegal actions “have put U.S. companies at a serious disadvantage, and tariffs give American manufacturers a chance to compete.” Glas noted that U.S. trade officials have “stressed that the penalty tariffs also create leverage and are a ‘significant tool’ in ongoing negotiations with China.”
 
While some advocates for lifting the tariffs point to concerns about inflation, Glas said, “canceling these penalty duties would do little to ease Americans’ inflationary pains.” She also noted that “apparel prices out of China continue to hit rock bottom even with the Section 301 tariffs in place. As detailed in an economic study recently released by Werner International, U.S. import prices for apparel from China have dropped 25 percent since 2019 and 50 percent since 2011.”

Glas also warned that lifting the tariffs would have “a substantial negative ripple effect” on U.S. free-trade agreements, including undermining those with Western Hemisphere partners that have established shorter coproduction supply chains and serve other U.S. and regional interests.

The Section 301 tariffs were first imposed in 2018 in response to China’s persistent violations of intellectual property rules. By law, they are now under review.

The premiere of the large Premium Group event cosmos in Berlin was with a number of visitors of 70% compared to before Corona a great success. The new combination of B2B and D2C, entertainment and edutainment, fashion and culture provided a lot of exchange, new input, ideas, contacts and 360 degree inspiration.

In focus: content & communication
With the conferences FASHIONTECH, CONSCIOUS CLUB Conference and The Ground Talks, the Premium Group Team put an additional focus on communication and edutainment. Important topics such as diversity, wellbeing, metaverse and sustainability were discussed and relevant lessons learned for the market, brands and consumers.

“Restart was a statement!”
“It's been quite a rodeo ride putting together two B2B trade shows, one D2C festival, three conferences, parties, dinners and receptions for so many different audiences and all while the pandemic continues in full swing – barring the rain and flight chaos. I would have wished that even more visitors would have come, but overall the restart was much better than expected. It was definitely an announcement." Anita Tillmann, Managing Partner Premium Group

New togetherness, new exchange, new ideas
With the premiere of the festival for style & culture, The Ground, young consumers and Berlin communities from GenZ and GenY were part of the Premium Group event cosmos for the first time. Almost 6000 fashion enthusiasts and trade visitors came together at The Ground. Exciting conversations, interactive fire moments and cool shows created a special vibe in and around the Palais am Funkturm. The focus was on young target groups wearing, feeling and thinking. How brands can reach young customers, communicate with them and build trust and much more.

New community through 'Larger than Life Ball'
On Saturday, the day with the most visitors at The Ground, the spectacular ballroom event, the Larger than Life Ball, curated by The House of Gorgeous Gucci in the summer garden of the Palais, caused enthusiasm. Numerous stars and friends of the international LGBTQ+ scene from New York, Rio de Janeiro and Berlin celebrated a colourful open-air party for over 5 hours with cool music and live MC, sensational outfits, plateau heels and wild vogueing and dance competitions on a water catwalk.

Must have PEACE charity initiative
The must-have PEACE merch collection initiated because of the Ukraine war in favour of Be An Angel e.v. was very well received. The sale of limited-edition clothing and accessories from Carry, Closed, Drykorn, Eastpak, Lala Berlin, Lee, Le Specs, MCM, Merz b. Swans and Wranglers as well as generous donations from Boss, among others, brought in a total of almost 15,000 euros. The remaining stocks are promoted and sold via influencer accounts.

January 2023: Happy Birthday, PREMIUM!
The next Premium Group event cosmos will take place from Tuesday, January 17th to Thursday, January 19th, 2023 with a B2B focus again at the Berlin exhibition centre. The focus is on a big anniversary: the PREMIUM will be 20 years old! After the successful kick-off, the CONSCIOUS CLUB Conference will also be further developed for the next round.

The Berlin Fashion Week and Premium Group events will take place at the same time again from 2023.

Facts

• Premium Group event cosmos
• 2 trade shows: PREMIUM and SEEK
• 1 festival: The Ground
• 3 conferences: FASHIONTECH, CONSCIOUS CLUB Conference, The Ground Talks
• More than 800 participating brands
• 45,000 sqm total area
• 50 talks & panels with 85 speakers
• Newcomer brands: 230 at PREMIUM, 134 at SEEK

Carbios has signed an agreement with On, Patagonia, PUMA, and Salomon, to develop solutions that will enhance the recyclability and circularity of their products.
 
An important element of the two-year deal will be to speed up the introduction of Carbios’ biorecycling technology, which constitutes a breakthrough for the textile industry. Carbios and the four companies will also research how products can be recycled, develop solutions to take-back worn polyester items, including sorting and dismantling technologies, and gather data on fiber-to-fiber recycling as well as circularity models.
 
The challenge the four brands share, is that their ambitious sustainable development goals can only partially be met by conventional recycling technologies which mostly target bottle-to-fiber recycling. Future regulations will require more circularity in packaging and textile. Yet the market consensus is that there will soon be a shortage of PET bottles, as they will be used for circular production methods in the Food & Beverage Industry.   
 
Carbios’ innovative process constitutes a technological breakthrough for the recycling of polyester (PET) fibers, which are widely used in apparel, footwear and sportswear, on their own or together with other fibers. PET polyester is the most important fiber for the textile industry with 52 MT produced, even surpassing cotton at 23MT. The biorecycling process uses an enzyme capable of selectively extracting the polyester, recovering it to recreate a virgin fiber. This revolutionary technology makes it possible to recover the PET polyester present in all textile waste that cannot be recycled using traditional technologies.
 
PET plastics and fibers are used to make everyday consumer goods such as bottles, packaging and textiles. Today, most PET is produced from fossil resources, then used and discarded according to a wasteful linear model. By creating a circular economy from used plastics and fibers, Carbios’ biorecycling technology offers a sustainable and more responsible solution.

Exhibiting companies can now register for A+A 2023! The world's leading trade fair and congress event for personal protection, occupational safety and health at work will take place in Düsseldorf from 24 to 27 October 2023.

Under the motto "People count", numerous exhibitors will present innovative solutions and concepts for safe and healthy working at A+A 2023. This time, the thematic umbrella of the international trade fair is formed by the megatrends of digitalisation and sustainability.

Decision-makers and experts will find cross-sector solutions and answers to the important questions surrounding a safe, healthy and sustainable workplace. From personal protective equipment (PPE), operational fire protection, environmental protection or disaster prevention to offers for ergonomic and healthy workplace design.

The focus will be on topics such as sustainability and the circular economy of products, digital services in the provision, care and storage of PPE, mobile working, exoskeletons (wearable robots) and wearables. Forums and side events as well as an innovative Start-up Zone complement the trade fair and set new, future-oriented impulses.

For more information and registration click here.

• The Borvida™ portfolio introduces sustainable base chemicals to Borealis’ range of product offering
• The range will initially be based on non-food waste biomass, and chemically-recycled waste; in the future it will also draw from atmospheric carbon capture
• The traceability of the content will be based on Mass Balance, which is ISCC PLUS certified
• This is the next step in an ambitious sustainability journey, which will see Borealis move away from traditional fossil-based feed

Borealis is strengthening its EverMinds™ circular product offering with Borvida™, a range of sustainable base chemicals.

The Borvida portfolio will offer base chemicals or cracker products (such as ethylene, propylene, butene and phenol) with ISCC Plus-certified sustainable content from Borealis sites in Finland, Sweden and Belgium. The move is part of Borealis’ broader commitment to a Future-Positive Revolution, in which the unrivalled benefits of base chemicals and polymers can be enjoyed at minimal impact to the planet.   

The portfolio will initially comprise Borvida B, from non-food waste biomass, and Borvida C, from chemically-recycled waste. In the future, the range will evolve to include Borvida A, sourced from atmospheric carbon capture. Borvida is complementary and is the building block to Bornewables™, a portfolio of polyolefins based on renewably-sourced second generation feedstocks, and Borcycle™, which offers circular polyolefins produced from mechanically- and chemically-recycled plastic waste.

Borealis produces a wide range of base chemicals for use in numerous industries based on various feedstock, such as naphtha, butane, propane and ethane. Through its olefin units (steam cracker and propane dehydrogenation), it converts these into the building blocks of the chemical industry: ethylene, propylene and C4 hydrocarbons (butylenes, ethyl tertiary-butyl ether (ETBE) and butadiene), and C5-6 hydrocarbons (pygas, phenol) among others.

The basis of the Borvida portfolio is Mass Balance, a Chain of Custody model that enables sustainable content to be tracked, traced, and verified through the entire value chain, offering sustainability-assured products from feedstock to end product. Using this model, circular alternatives can be offered in a cost-effective and environmentally-conscious way, which can be scaled up quickly without compromising on quality or efficiency.

Borvida can be used for a wide range of different polymer and chemical applications, also beyond polyolefins (PO). Non-PO polymers, such as polycarbonates, acrylonitrile butadiene styrene (ABS), super absorbant polymer (SAP) and other chemicals, are utilised for various end applications including coatings, plasticizers, adhesives, automotive, electronics, lubricants, detergents, appliances and sports equipment.

Together with key strategic partners, including Neste and Covestro, Borealis strives to provide a long-term solution in order to allow value-chain partners to meet their sustainability goals. Borvida will enable our customers to increase the sustainability of their products, keeping them ahead of forthcoming legislative changes, and meeting their customers’ demands for climate-conscious products.

Introduced on a smaller scale in early 2020, early renewable base chemicals customers include Covestro. “The use of alternative sustainable raw materials is one important pillar of our strategic ambition to become fully circular”, comments Frank Dörner, Managing Director Covestro Procurement Services GmbH & Co. KG. “The new product line is a good example for joint solutions, another strategic pillar, in order to establish new and reliable supply chains creating benefits for our customers.”

The story started with a huge market demand for the industrial synthesis of Indigo during the late nineteen century. The first Industrial Synthesis of Indigo, Indigo Pure BASF, was successfully manufactured and introduced into the market by BASF in July 1897. It was a significant achievement for the German Chemical Industry.

Over the years, the product has made revolutionary changes to the supply chain. New technologies enabled the transformation of Synthetic Indigo Powder application to pre-reduced DyStar® Indigo Vat 40% Solution. Being the pioneer in the market, the pre-reduced solution set an important industry milestone when it was first launched in 1998.

DyStar’s innovation remains a core catalyst in our chemistry research and development journey. When the DyStar® Indigo Vat 40% Solution was introduced, the core intelligence lies behind the benefits from Sustainability to Health and Safety. The technology transforms Indigo into its soluble Leuco form, making the Indigo dyeing process more sustainable, efficient, and stable in production. In addition, workers in Denim Mills can be assured of product safety as well.

Similarly, in recent modules under Cadira® Denim, DyStar introduced the first salt-free Indigo dyeing process in history. The applied technology completely eliminates hydrosulphite in the application of Indigo.

Yanfeng, a global automotive supplier, recognized the performance of its European suppliers with its annual Supplier Awards. During a ceremony at the company’s European Headquarters in Neuss, a total of 13 suppliers yesterday received the awards in two categories.

With one Distinguished Supplier award and twelve Supplier Excellence awards in five sub-categories, YF evaluated its suppliers according to several criteria. The company’s vision of technology and innovation, as well as sustainability, were particularly important. Moreover, quality, cost, service and customer satisfaction were also assessed.

The award recipients from Europe were:

Distinguished Supplier Award:
- BASF Polyurethanes GmbH, Germany

Supplier Excellence Award – Quality:
- Industrias Alegre S.A., Spain

Supplier Excellence Award – Customer Satisfaction:
- DSSI International, LLC, Slovakia
- SIGIT d.o.o., Serbia

Supplier Excellence Award – Sustainability:
- HOFFMANN + VOSS GmbH, Germany

Supplier Excellence Award – Technology and Innovation:
- SemsoTec GmbH, Germany
- Lightworks GmbH, Germany

Supplier Excellence Award – Service:
- CTP, Czech Republic
- Milsped d.o.o., Serbia
- Prewave GmbH, Austria
- Schneider Electric SE, France
- SPARETECH GmbH, Germany
- Weber GmbH & Co. KG, Germany