Blue jute curtain is a decorative object. It needs to be built within the range of a Workbench.
Blue jute curtains can also be found adorning the Dvergr structures build of Black marble throughout the Mistlands. There, they can be broken to obtain their Blue jute, although if a player damages them (or any other structure in range of a Dvergr Ward), nearby Dvergr will become hostile and attack players.