According to feedback from several cotton spinning companies in Jiangsu, Henan, Anhui and other places, since mid-to-late February, inquiries and shipments of cotton yarns using imported cotton such as US cotton/Brazilian cotton/Australian cotton/Indian cotton have not picked up significantly. 40S and Cotton yarns of the above counts continued to be deserted before and after the Spring Festival (including high-count compact spinning and siro spinning), and the inventory rate of cotton yarns showed a slight rebound. Most of the imported cotton spinning orders of textile enterprises were adjusted to on-demand production, leaving less inventory.
A 60,000-spindle yarn factory in Xuchang, Henan said that during the post-holiday period, due to the overall recovery of the operating rates of weaving enterprises in coastal areas such as Guangdong, Jiangsu, Zhejiang, and Fujian, the enthusiasm for cotton yarn replenishment was high; in addition, some traders in the light textile market increased their Due to the intensity of stockpiling, the sales of medium and high-count carded/combed yarns made from imported cotton from Brazil and the United States have rebounded at this stage. A few manufacturers even have a tight supply of C26S-C40S knitting yarn, which is expected to be a problem for China in the first and second quarters of 2023. Anticipations of economic recovery, accelerated recovery of the global economy and consumer market, resurgence of orders from Europe and the United States, depreciation of the renminbi, etc. have made cotton textile and apparel companies continue to be optimistic about the export market’s “turn of peaks and success after all hardships.”
However, the activity and bustle of imported cotton yarn only lasted for about half a month. The situation changed, and the pressure for both transaction volume and price to peak and fall increased. Most textile companies had to take the initiative to reduce workshop orders and reduce cotton yarn inventory. In order to mobilize funds and maintain production, consumer demand for US cotton, Brazilian cotton, Australian cotton, etc. has also weakened.
Industry analysis: First, after the Spring Festival, mid-to-high-priced and high-value-added traceable orders were still mainly short-term and bulk orders. The expected large and long-term orders did not arrive as scheduled, and the conflict between high expectations and weak reality was greater.
Second, as the main ICE cotton futures contract approached the 80 cents/pound mark in mid-February, foreign brand clothing companies and buyers were fiercely lowering prices. In addition, most of them were filling orders and rushing orders. It was not smooth to receive traceability orders, and profits were reduced. Lead time became a major obstacle.
Third, the trend of inverted domestic and foreign cotton prices continues. The cost of spinning imported cotton yarn such as Australian cotton, American cotton, and Brazilian cotton is relatively high, and is only suitable for companies with stable export orders and rigid demand for imported cotton and cotton yarn. According to the survey, the net weight quotations of Brazilian cotton M1-1/8 (strong 28/29/30GPT) in Qingdao, Zhangjiagang and other places from February 27th to 28th were concentrated at 16500-16750 yuan/ton, which was still higher than the “Double 28” in mainland warehouses Xinjiang machine-picked cotton costs more than 1,000 yuan/ton (need to consider the price difference between net weight and common weight).
Fourth, although the quotations for cargo, bonded and customs-cleared foreign yarns in China’s main ports have continued to stabilize recently, “black-box” operations by yarn mills and cotton yarn traders in Vietnam/India and other countries have increased, and the bargaining space has expanded, which in turn has affected the import of cotton and cotton yarn. Forming suppression (for small orders and traceable orders with short delivery times, cloth factories and foreign trade companies tend to directly import cotton yarn to complete).
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