Spun yarn prices could now stabilize in China after having sharply fallen in the last weeks on the domestic and import markets. Fiber prices are bottoming out whereas yarn production has been reduced amid a falling demand.
Spun yarn prices have continued dropping in the past days in China, with spinners taking into account the previous decline of fiber prices.
With cotton and polyester however bottoming out on the domestic market, spun yarn prices should now stabilize after a very significant drop in the past weeks.
If for instance considering the Qianqing market in Zhejiang, cotton yarn prices have dropped 6.5% from their level by early May.
100% PSF yarn prices have even plunged by nearly 12% in the meantime.
Demand is still very depressed from downward processors.
Clothing retail sales have apparently recovered in May after declining in April for the first time in 10 years.
Apparel exports have however continued sharply decreasing in April, therefore depressing demand for spun yarns.
Yarn plants have reacted in reducing their production levels or even shutting down their doors.
On the yarn import markets, participants complain about the very low level of business activities.
Import prices have lost about 8 cents per kilo in only four weeks, or 3% to 3.2%.
The decline remains more limited in yuan terms, due to the weakness of he renminbi.
As a consequence, import prices are not yet competitive compared with domestic yarns.
Source: Emergingtextiles
