According to the feedback from cotton yarn traders in Guangdong, Jiangsu and Zhejiang, cotton quotations from India, Pakistan, Vietnam and other places have continued to fall since the beginning of March. There are obvious signs of inquiry and transaction "cold spring", especially the Indian cotton yarn has been affected by the rupee against the US dollar. The significant depreciation, the sluggish domestic consumption of cotton yarns in India, and the sharp decline in imported cotton prices have led to the decline in yarn mill costs. FOB and CNF prices have been slightly reduced. Although more than a week ago, the ICE cotton futures contract fell below 62 cents / pound, approaching the 60 cents / pound mark, the price of imported "future yarns" fell and then dropped, and domestic downstream weaving, apparel and foreign trade companies resumed work. The production progress is continuously accelerating, but the merchants signed the contract in April / June / June. The outer yarn is still hesitant and cautious. Only the C20S-C32S high-package bleached cotton yarn needs to be gradually recovered (including knitting, air-jet or rapier yarns). OE yarns and 8S-16S Siro spinning, which had better shipments in December / January, were both “volume and price” down.
Why are Chinese weavers and traders not interested in signing "future yarns"? The industry analysis has the following points:
First, with the outbreak of the new crown pneumonia COVID-19 outbreak in more than 100 countries, China's textile clothing exports have been subjected to another round of "tests" following the Sino-US trade war. A Shanghai foreign trade company stated that in February, customers in Italy, Germany, and Spain first reduced their order quantity by 40% -50%, and then notified that they did not cancel the order and postponed delivery because the stores were closed and when they were shipped.
Secondly, although weaving, printing and dyeing downstream companies have a relatively high rate of resumption (especially in coastal areas such as Jiangsu, Zhejiang and Shandong), the proportion of resumption of production is generally low, and since mid-February, orders before the Spring Festival are mainly completed, and new orders are compared. Less, and few in the medium to long term;
Third, the global economic uncertainty caused by the collapse of OPEC + production reduction negotiations and the new crown epidemic has increased sharply. The global consumer demand for cotton and cotton yarns is facing a greater contraction. ICE deposits have fallen below 60 cents / lb or even 58.84 cents / lb before the risk of low Buyers worry that it is not the bottom of the yarn price but the waist or even the shoulder that they copy, so they would rather wait and see and move less.
