According to feedback from cotton yarn trading companies in Foshan, Jiangsu and Zhejiang, Guangdong, since mid-to-late July, the domestic cotton yarn import market supply has been “tight at both ends and loose in the middle” – OE12/OE16S high-quality packaged bleached cotton yarn and JC40S and above Indian/Vietnamese cotton yarn Inventory continues to decline, and market supply gradually tightens; while C20S-C40S carded yarn is in sufficient supply, and trading continues to be light.
An import and export company in Shaoxing stated that there are three main reasons for the short-term tight supply of imported yarn with high mix and bleached OE12 and OE16S: First, since mid-May, the proportion of domestic small and medium-sized cotton spinning mills reducing production and suspending production has continued to rise. The supply of yarn has dropped sharply; secondly, orders for traceable cotton textiles and cotton products exported to the United States and the European Union have gradually rebounded recently. Some weaving and denim clothing companies in coastal areas have adopted package-bleached OE12S, OE16S, etc. to replace higher-priced ring spinning yarns. To achieve the purpose of cost reduction; thirdly, due to the continuous high level of inversion of domestic and foreign cotton and domestic and foreign cotton yarn in the past two months, coupled with the sharp rise and fall of ICE cotton futures, some cotton yarn contracts from India/Pakistan and other origins have been “repurchased” or canceled , resulting in low inventory of port bonded, customs cleared high-quality bleached OE yarn and high-count blowroom yarn of 40S and above.
According to customs statistics, China’s cumulative imports of cotton yarn from January to June 2022 were 729,000 tons, a year-on-year decrease of 36.10%; of which, Vietnam’s cotton yarn imports were 399,300 tons, accounting for 54.77%; Pakistan’s yarn imports were 93,600 tons, accounting for 54.77%. Accounting for 12.85%; Indian yarn imports totaled 50,300 tons, accounting for 6.91%.
Some weaving factories and middlemen believe that as of now, traceability orders are still mainly short-term and small orders; coupled with the sharp price difference between domestic and foreign cotton yarn, receiving orders from the United States and Europe is low-profit, risky, and currently downstream companies generally have funds. The situation is tight and the inventory of finished products is under great pressure. Therefore, we need to be extra cautious when signing contracts to purchase imported cotton yarn cargo, and we must be “targeted”.
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