A tailor must be anywhere in the Netherstorm zone to craft Spellcloth. Tailors with spellfire specialization obtain two Spellcloth from the materials for one.
Note:
As of Patch 3.0.8 there is no longer a cooldown on Spellcloth.
Warning!
Crafting Spellcloth spawns a level 70 Angered Nether-wraith (Arcane Elemental), which drops 1-3 Motes of Fire and 1-3 Motes of Mana, giving a sort of refund to players capable of killing them.
You can summon the elemental anywhere in the map, but it is advisable to fight in a populated area, where someone might help you kill it. Area 52 guard NPCs will now engage the elemental. The elemental channels Arcane Missiles and cast a powerful Shadowbolt after a while. Although not elite, killing it solo is difficult for characters not yet 70, or those unprepared to fight it. Before engaging equip any arcane-resistance gear, if available. Mages should have up the Mana Shield plus Dampen Magic, and save the Counterspell for the dangerous Shadowbolt, towards 20%-30% of the mob's hp. He seems to be weak against Holy magic.
Mages can also Spellsteal a buff from nearby Shaleskin Flayers that reduces spell damage by 50%, one charge. Alternatively, they can cast a portal beforehand and just jump through it.