Price trend

According to SunSirs' commodity price analysis system: Last week, upstream cotton prices fell, and textile companies saw improved sales, resulting in relatively stable cotton yarn prices. As of January 16th, the spot price of 21S cotton ring-spun yarn in Shandong province was approximately 22,250 RMB/ton, unchanged from the week before last; the spot price of 32S cotton ring-spun yarn was approximately 23,600 RMB/ton, also unchanged from the week before last.

Last week, the actual transaction prices for cotton yarn decreased slightly by 100-200 RMB/ton.  High-count yarns remained in high demand, with some textile companies having orders booked until February, while sales of low-count yarns were sluggish. As the Spring Festival approaches, downstream buyers have increased their stocking slightly, leading to a significant decrease in yarn inventory. However, new orders are insufficient in the later period, and most textile companies have enough orders to process until before the Spring Festival. Inland textile companies indicated that their holiday schedule is earlier than the same period last year. Recently, Vietnamese yarn prices have continued to rise, with some mainstream varieties already booked until April. Driven by rising costs and supported by domestic Zhengzhou cotton futures prices, port import cotton yarn spot prices have generally followed suit. However, the current market is still primarily driven by cost pass-through and essential stocking, raising concerns about its sustainability.

Operating Status: Last week, some companies in mainland China experienced limited orders, leading to a slight reduction in operating rates to alleviate inventory pressure. Operating rates in mainland China were at 50-60%, while operating rates in Xinjiang remained stable at over 90%. As of January 15th, the operating load of textile enterprises in mainstream regions was 64.6%, a decrease of 0.15% compared to the week before last.

Inventory Situation: Yarn transactions increased last week, mainly due to downstream companies stocking up before the holidays. Inventory levels decreased significantly, with finished yarn inventory in Xinjiang at approximately 34-38 days and mainland enterprises at around 20-23 days. As of January 15th, the average yarn inventory for textile enterprises in major regions was 31.2 days, a weekly decrease of 4.29%.

Cost side: Last week, Zhengzhou cotton prices retreated from their highs, while spot market basis remained firm, reflecting ongoing supply and demand dynamics. The USDA's downward revision of production forecasts provided support to the market bottom. In the spot market, new cotton processing is nearing completion, resulting in ample supply. Downstream buyers are replenishing stocks to meet pre-holiday demand, leading to a noticeable increase in inquiries. The cotton market is expected to undergo range-bound adjustments in the near future.

Demand side: The overall order volume in the greige fabric dyeing and printing market has been average recently. Raw material prices have risen, while greige fabric prices remain relatively stable. Inventory levels are high, and orders mainly consist of small orders and repeat orders. Some older products have seen repeat orders.  Shipments of coarse and thick greige fabrics and home textile downproof fabrics are slightly faster, with many manufacturers rushing to meet pre-Chinese New Year deadlines. According to statistics, as of January 15th, the average operating rate of domestic cotton textile manufacturers was 38.77%, a decrease of 0.79% compared to the previous period.

Market Outlook:

As of January 16, textile companies had decent order volumes, and demand for medium-to-high count yarns was strong. Supported by high cotton prices and a significant decrease in inventory, cotton yarn prices are expected to remain stable in the short term.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com