Price of synthetic fiber

As a product class produced mainly from petroleum, the price of synthetic fiber is very sensitive to developments and changes with the world price of crude oil. However, the price of synthetic fiber exhibits a significantly lower level of volatility since it is not typically traded on the open market; domestic manufacturers must also compete with a strong import market and with domestic cotton manufacturers. As a result, the price of synthetic fiber only increased 4.1% from 2000 to 2010, whereas the world price of crude oil increased a substantial 179.9% during the same period. In addition, most synthetic fiber manufacturers are large-scale chemical companies that can easily absorb sudden input price increases for a small portion of their operations.

Movements in the price of oil, along with the performance of the world economy, have caused significant fluctuations in the price of synthetic fiber in recent years. As the price of oil climbed steadily before the recession, the price of synthetic fiber grew as well, increasing at an annualized rate of 2.3% from 2004 to 2008. However, the price of oil plummeted in 2009, and this factor, coupled with diminished demand from textile manufacturers, caused the price of synthetic fiber to drop 2.7% that year. Moreover, while the price of oil recovered in 2010, the continued stagnation of the textile manufacturing industry caused the price of synthetic fiber to decline an additional 1.5%. However, the price of synthetic fiber rose 5.5% in 2011, the biggest single-year increase in over 20 years, largely because of a significant rise in the price of cotton. The high price of cotton shifted demand to its substitute, synthetic fiber. While the price of cotton declined significantly in 2012, the price of crude remained elevated. As a result, the price of synthetic fiber increased 4.0% in 2012. Prices remained high through 2014, only to fall 3.1% in 2015 and 2.0% in 2016 as the world price of crude oil plummeted.

While the price of synthetic fiber increased from 2017 to 2019 alongside strong economic growth, it declined 3.5% in 2020 as a collapse in demand stemming from the COVID-19 (coronavirus) pandemic economic shutdowns pushed producers to cut prices. In line with this period, consumer demand for apparel items from which synthetic fibers are derived, the closings of many retail locations at the time hurt demand for these items, reducing orders from these locations for more of these items to fill their shelves. The need for more clothing was not apparent during the year, especially because of stay-at-home orders and pandemic restrictions, which prevented more people from going to more outdoor events in the time, which reduced the risks of clothing wearing out more due to the lack of exposure from extreme weather and sweating from more physical excursion. Further contributing to pandemic-related price declines, the world price of crude oil plummeted 32.7% in 2020 alone. As pandemic-related restrictions lifted in 2021, demand rebounded, contributing to the price of synthetic fibers increasing by 14.0% in the year.

With rising issues in 2022 from the war in Ukraine, which raised crude oil prices because of sanctions imposed on Russia and also from changes in the price of cotton from volatile weather conditions affecting cotton stocks based in the US, the price of synthetic fiber continued to expand at an exponential rate of 9.8% during the year alone. Strong retail sales in 2023 helped surge more spending in the year, leading to an enhanced need for varying downstream products made from these materials. These factors and inflationary pressures have been giving a 2.7% price boost in the year. The popularity of smarter online strategies by apparel and fast fashion brands that utilize social media platforms for selling has led to a sustained need for clothing, boosting the need for synthetic fibers. This has driven their prices in 2024 and will continue into 2025. As "social commerce" through social media platforms becomes increasingly integral to the fashion and apparel industry's sales, the market for synthetic fibers will likely remain robust.