Cotton yarn prices have slightly risen in the past seven days in China, at least for specific counts and market locations, after wages have been raised at spinning mills in post-holiday period. Demand remains however very depressed from processors, if compared with previous years.
Cotton yarn prices have continued slightly rising in the last seven days in China, as far as specific counts and locations are concerned.
In Qianqing (Zhejiang) for instance, 21S, 32s and 40s carded kntting have gained 150 yuan per metric ton (2 cents per kilo) or about 0.6%.
The slight rise of cotton fiber prices on the domestic market may explain why price offers have been increased.
The cotton indicator has only risen 20 yuan per MT or 0.1%, however.
Chinese spinners are actually forced to rehire their employees at higher wages after their long holidays.
Salaries have risen a few hundred yuan per month and margins have therefore declined accordingly, whatever the low share of labor costs in yarn production.
Unusually low demand
More importantly, demand has not rebounded in line with what had been experienced in previous years, as a clear sign that the textile industry is confronted with a severe slowdown.
Fabric prices have not been raised and demand for yarns is being kept at minimum levels.
Reflecting the current lack of weaving and knitting activities, cotton yarn imports have declined 16% and 20% in January, in volume and US$ terms respectively, from the same month in 2018.
Cotton yarn exports have however risen 3% and 8% in volume and dollar terms.
Higher polyester yarn prices?
On the polyester market, PSF prices have dropped after holidays but they could now bottom out over a rise of material costs at fiber plants.
Filament yarn prices have already increased in the past two days in China.
Polyester spun prices could therefore slightly climbed in the coming period, although this could be limited by the lack of demand.
On the viscose market, fiber prices have begun sliding, but yarn offers have not been lowered, however.
This should be done in coming days.
Cotton yarn import prices have not moved or slightly declined in dollar terms depending on origins, and whatever the rise of the renminbi in the last weeks.
The end of US-China trade negotiations could trigger a sudden rebound in demand with everyone anticipating a rise of prices and therefore accumulating stocks.
Source: Emergingtextiles
