Jul'20 cotton yarn imports may increase 7.47% m-o-m to 151kt – ChinaTexnet.com
Home >> Textile News >> Jul'20 cotton yarn imports may increase 7.47% m-o-m to 151kt

Jul'20 cotton yarn imports may increase 7.47% m-o-m to 151kt

2020-08-07 09:25:02 CCFGroup

1. Imported cotton yarn arrivals to China assessment



Imported cotton yarn arrivals to China in July 2020 are estimated at 151kt, down 7.36% y-o-y and up 7.47% m-o-m. In mid-May, a wave of ordering appeared on the market, and the cargoes were delivered successively. Due to much lower cost, this batch of cargos will bring profits to traders if sold at current market price. But as China cotton yarn price moves down, the profits will tend thin.



According to foreign shipment data in June, cotton yarn imports of China from Vietnam in Jul are estimated at 70.4kt; from India 20kt; from Pakistan 25.2kt, from Uzbekistan 15kt, from Indonesia 7kt, from Taiwan 5kt, and from other regions and countries at 8kt. (The export data of foreign cotton yarn is lost much and large deviation may exist.)

2. Traders' reflection



Note: Over 30 enterprises are surveyed, covering over 50% of cotton yarn imports.

Major traders and L/C issuing companies expected that Jul arrivals will be flat with Jun ones.

3. Imported yarn stocks and supply and demand outlook in Aug



The stocks in the ports are estimated at 215kt, of which in Jiangsu and Zhejiang are 86.9kt, in Guangdong and Fujian are 89kt and in Shandong and Hebei are 28kt. In Jun-Jul, arrivals of imported cotton recovered. Amid soft demand, traders’ sales moved slowly and their stocks increased to historical high, weighing on cotton yarn price.



Looking from demand, operating rate of fabric mills weakened obviously in Jul than that in Jun. It was mainly because that in Guangdong, Shandong and Hebei remained low and in Jiangsu and Zhejiang declined obviously. Entering Aug, demand in China local market and overseas market recovered slightly and orders in Foshan and Ningbo increased a little, but there was no sign of improvement trend. In addition, fabric mills mostly held bearish attitude to market outlook.



In Jiangsu and Zhejiang, the operating rate of fabric mills declined. That in Changzhou and Nantong was about 30% and in Lanxi 40-50%. In Guangdong, that kept at about 30% and the market did not show obvious improvement. In North China, the operating rate was plain. In Weifang, it was at about 30% and in Gaoyang, it remained low. 

At present, except imported cotton yarn stocks stayed at historical high level, China domestic cotton yarn inventory reached 1-1.5 months. Under sustained bearish demand, the pressure on the market enlarged gradually. Cotton yarn price has been in downtrend, especially high-count cotton yarn. Except oversupply, buying sentiment was soft too. After inventory accumulation in Jun-Jul, cotton yarn price is likely to keep weak in Aug. Cotton yarn may be undersold as domestic spinners and imported cotton yarn traders are burdened by capital pressure. The good news is that, due to high inventory and huge losses, domestic spinners may cut production further and imported cotton yarn traders will also place orders cautiously, thus, the pressure of cotton yarn supply side in Sep-Oct may reduce. Cotton yarn demand in Aug-Oct has large potential to turn better on the month, so at that time, the market will see game between high inventory and demand recovery. Currently, the large amount of stocks are hard to be consumed.

Keywords: