The yarn sector closed 2020 with serious losses: the turnover for the sector fell by -27.2% on an annual basis, burning more than 750 million euros in twelve months, and reaching just over 2 billion euros.
The most significant decreases, as indicated by imports and apparent consumption, were recorded on the domestic market, but foreign sales also lost considerable ground, falling by -19.6%, a variation worse than those already experienced in the two-year period 2008-2009.
Both wool and cotton recorded negative trends in the twelve months of the year. The Awex Eastern index fell by -31.5%, the ‘A’ cotton index fell by -9.2% in European currency.
For Italian yarn, 2021 opened with ups and downs. In the first quarter, the ISTAT industrial production index for spinning activities (ATECO Code CB 13.1) first showed a timid sign of recovery, with an increase of +0.6% on an annual basis. More specifically, in terms of physical production, January and February respectively lost -14.3% and -12.6% compared to last year, while March showed a rebound of +45.0% compared to March 2020, the month in which companies were hit by the first lockdown.
With reference to performance on foreign markets, for the third year in a row, yarn manufacturers showed a decline in exports: while the first 3 months of 2019 and 2020 closed with decreases of -2.5% and -8.7% respectively, January-March 2021 saw a drop of -7.1%, for a total of 185.9 million euros. Cotton and knitting yarns, in particular, enabled the yarn sector to contain its quarterly losses in terms of foreign sales.
Imports, which closed at -0.5% in the first quarter of 2020, experienced an even greater decline of -16.2%, falling to 166.3 million.
The trade balance for the period was therefore positive at 19.5 million euros, and strengthened compared to the 1.5 million euros in the first quarter of 2020.
Analysing the results in terms of exports for the individual types of yarns considered here, cotton yarns showed a change of pace, experiencing a favourable increase of +5.2%, while linen yarns showed a decrease of -18.3%.
Foreign sales of wool yarns continued to decline, with the exception of knitting yarns.
Exports of combed yarns fell by -12.8%, carded yarns by -16.8%, while chemical/wool blend yarns fell by -15.0%. On the other hand, exports of knitting yarns increased by +27.1%.
With regard to imports, cotton and linen were both down, falling by -6.5% and -8.3% respectively. In the case of wool yarns, the most serious negative change concerned combed yarns (-32.6%), while all the other types of wool yarn saw an increase in incoming flows: imports of carded yarns grew by +1.2%, chemical/wool blend yarns by +4.5%, and knitting yarns by +29.5%.
If we look at the performance in terms of quantity, from January to March 2021, exports fell by -2.8%, which is less intense than that recorded in value terms. Wool combed yarns fell by -5.2% and wool carded yarns fell by -7.9%. Chemical-wool blends fell by -7.6%; while knitting yarns were up by +7.5% in volume terms. Exports in tonnes of cotton and linen yarns showed a dichotomous trend: the first increased by +1.5%, the second decreased by -14.9%.
Contrary to the value trend, imports in volume terms recorded a slight increase of +0.3%. Chemical/wool yarns contributed to this result, up by +48.4%, knitting yarns increased by +89.6%, and linen yarns increased by +8.9%.
Other product categories, on the other hand, witnessed the following decreases in imported volumes: -24.2% for carded yarns, -19.4% for combed yarns, -4.5% for cotton yarns.
In the first three months of 2021, the United Kingdom was the top destination for carded yarns, accounting for 16.9% of the total, thanks to a contained decline of -8.3%. Hong Kong fell to second place, with a drop of -41.6%. On the other hand, direct exports to China grew by +71.7% reaching 9.3% of the total. Sales of carded yarns also increased in Romania (+37.9%) and Turkey (+44.8%). In the case of combed yarns, despite a -13.8% decrease, Romania is in first place, with a share of 11.6%. France and Germany instead experienced a growth in exports of +7.0% and +2.4% respectively. Direct exports to Hong Kong and Turkey fell by -38.1% and -11.8% respectively. As for chemical-wool blend yarns, Austria was confirmed as the No. 1 destination: although down by -8.5%, it was able to absorb 16.5% of the sector’s exports. In second place is Croatia, down -5.6%, with a share of 11.1%. France and Germany showed opposing trends: the first grew by +74.3%, the second fell by -43.4%, similar to Turkey (-38.5%).
As regards the main outlets for cotton yarns, Germany is in first place, accounting for 17.3% of the sector total, even if it fell by -7.4% in the period under review. The other four markets, on the other hand, all developed favourably, albeit with very different rates of intensity. Exports of cotton yarns to Portugal grew by +113.5%, those destined for France by +10.6%; sales to the United Kingdom increased by +27.7%, and finally, the Czech Republic saw an increase of +4.2%.
Considering foreign supplies, in January-March 2021, the top two suppliers, accounting for 65.2% of Italian carded yarn imports, showed a dichotomous trend: the United Kingdom moved into first place as a result of a +22.1% growth, while Lithuania fell by -29.9%. China, in third place, experienced an increase of +16.5%. Carded yarns from Poland increased by +68.0%.
With regard to combed yarns, Poland limited its decline to -1.2% which accounts for 30.3% of imports for the sector, while Romania fell by -24.8%. Bulgaria and the Czech Republic were both down by more than -50%. On the other hand, China showed an increase of +1.5%, accounting for 9.0% of the total. 36.0% of imported chemical-wool blend yarns came from Romania, and 27.9% from Turkey: in January-March 2021, the first fell by -19.2% and the second increased by +140.5%. Bulgaria fell by 20.3% and Hungary by -35.1%. Imports from Portugal, on the other hand, rose by +40.9%. Lastly, Turkey accounted for 43.7% of cotton yarn imports to Italy in the period under review, thanks to an increase of +9.4%. China showed a slight decrease of -1.0%, accounting for 13.0% of the sector total. Imports from Egypt showed a more marked drop of -23.3%, while India and Pakistan were down -43.0% and -39.3% respectively.