According to feedback from some cotton yarn traders and cloth mills in Jiangsu, Zhejiang, Guangdong and other places, some Indian yarn mills have suspended reporting far-month shipment prices to Chinese customers since mid-September (including several large manufacturers and brand companies), and the wait-and-see atmosphere is relatively strong; however, There are also a few small and medium-sized yarn mills and exporters who insist on quotation, especially the quotation and supply of OE yarn and C21S and below low-count ring spinning yarn have not been significantly reduced.
Weaving companies in Hangzhou, Shaoxing and other places said that the reasons for the recent decrease in quotations from Indian yarn mills mainly include the following points:
First, ICE cotton futures and domestic cotton prices in India in 2022/23 are expected to significantly increase in planting area/production but consumption continues to be sluggish, the Federal Reserve’s continued aggressive interest rate hikes have triggered increased concerns about a global economic recession, and the Russia-Ukraine war has triggered an energy crisis and other factors. There may be drastic adjustments, and it is difficult for spinning mills to effectively lock in raw material prices, and the risk of close to monthly orders is relatively high.
Secondly, since the second quarter of 2022, with the sharp inversion of prices between Indian cotton yarn and domestic cotton yarn, the obvious decline in traceability orders, and the strong competition from Vietnamese/Indonesian yarn mills, Chinese buyers’ enthusiasm for inquiry and order placement of Indian yarn has dropped to the freezing point in recent years. , it is also difficult to obtain effective responses from Chinese buyers for quotations.
Third, due to multiple negative impacts such as high cotton prices in 2021/22, a sharp drop in cotton yarn exports in June/July, and a large drop in export orders to Europe and the United States, the proportion of Indian yarn mills reducing and suspending production is at a high level, mainly supplying its domestic weaving and clothing. Enterprise needs, cotton yarn export capacity declines.
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