An eye on the markets: Uncertain times for textiles

The textiles market is clouded in uncertainty after a steady year, with export market and potential regulatory changes threatening to upturn the market once more.

The value for used clothes has not quite recovered from the crash in prices we saw in 2014, where charity shop grade textiles were trading for as much as £600 per tonne, falling right down to less than £200. We’re now creeping back up to £400 for good material.

However, there’s been a shift in quality. Charities report having to pick out the real rubbish from their material stream and although there is always variable quality of material in textile banks, if you look at the market prices now, they're much closer than they ever used to be.

Alan Wheeler, Director of the Textile Recycling Association.

Changes in public awareness of textile waste have exerted a slight downward pressure on prices. More media coverage has led to more donations to charity shops, which has also seen an increase in lower-quality textiles making their way into the material stream. A lot has been said about the impact of Marie Kondo’s Netflix series [which encourages people to declutter their
homes], but this has only been in areas that Netflix is popular.

Despite this increase in public awareness and donations, significant amounts of clothing are still going to landfill. Since WRAP’s 2016 textile market situation report, which stated that 350,000 tonnes of textiles entering the general waste stream, we’ve seen a fall to 300,000 tonnes, which is in the right direction.

We are also seeing some operators bringing their sorting process back to the UK, reversing a trend some of our members reported 18 months ago. Sorting of textiles is where the value is created, with some high- end sorted textiles trading for up to £2,000 per tonne, though this does not reflect the mix in quality when merchants purchase material.

Looking ahead, we are in uncertain shape as always. Exports continue to be a big market for textiles and the outlook for this could be profoundly impacted in a number of ways. Firstly, Brexit continues to cast a shadow, with the potential for customs delays, complicated by the fact that, being out of the EU, UK textile exporters will have to comply with the EU Waste Shipments Regulations to EU countries. Many destinations might classify textiles as waste for even small considerations like the presence of coat hangers.

This article was taken from Issue 96

Possibly the biggest long-term issue for the market is the impact of China exporting more used clothes, as its middle class becomes more affluent. This is notably already having a major impact on East Africa markets. For example, China is now responsible for 30 per cent of textile imports in Kenya; the UK’s share is now 20 per cent. It’s worth noting a potential future scenario in 20 years time where the size of China's market is the size of the current global export market by collecting just half as much clothing per head as we currently do in the UK.

East Africa is also continuing to generate its own issues, due to missed payments and currency fluctuations, though the threat of an export ban to East African countries proposed by the East African Community in 2016 has subsided.

Looking at mid-term factors in the UK, the recent UK Resources and Waste Strategy identifies textiles as one of the five priority waste streams for an extended producer responsibility (EPR) regime and invoking the polluter pays principle. Clothing should be a priority as it accounts for around 10 per cent of all greenhouse gas emissions, according to the Ellen MacArthur Foundation, and I hope it is introduced before 2022.

Perhaps on the cards a bit sooner, the government’s proposals for tackling waste crime include bringing in full environmental permitting for the collection and processing of textiles waste. The annual processing limit is set to change from 156,000 tonnes of textiles a year down to 100 tonnes, meaning that every textile waste collector large or small would have to have an environmental permit. This will come at considerable cost to many operators, forcing them to change their professional practices, while it could also depress prices as operators are pushed out of the market. Defra has stated that this change will likely come in after Brexit is completed – so we may be waiting some time!