Aug'20 cotton yarn imports may move down 1.48% m-o-m to 159.6kt –
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Aug'20 cotton yarn imports may move down 1.48% m-o-m to 159.6kt

2020-09-11 09:22:07 CCFGroup

1. Imported cotton yarn arrivals to China assessment

Imported cotton yarn arrivals to China in Aug 2020 are estimated at 159.6kt, down 1.72% y-o-y and 1.48% m-o-m. This batch of arrivals had lower costs than previous arrivals. Amid RMB appreciation, traders could gain a certain profits. 

According to foreign shipment data in July, cotton yarn imports of China from Vietnam in Aug are estimated at 70.4kt; from India 29kt; from Pakistan 20kt, from Uzbekistan 15kt, from Indonesia 8kt, from Taiwan 5.1kt, and from other regions and countries at 11.8kt.

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 Aug arrivals will be flat or a bit more compared with Jul ones. 

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

The stocks in the ports are estimated at 188kt, of which in Jiangsu and Zhejiang are 76kt, in Guangdong and Fujian are 80.5kt and in Shandong and Hebei are 23kt. Orders from foreign markets increased amid recovery of demand. Aug-Oct arrivals are predicted to keep normal or a bit more. At present, the stocks declined from previous period, but still at a high level. 

Looking from demand, the operating rate of fabric mills in Aug improved from that in Jul. Orders from overseas markets and domestic markets both recovered to different extent. Seasonal improvement was obviously seen on the market.

In Jiangsu and Zhejiang provinces, the operating rate of fabric mills was at about 40-60% in Changzhou and Nantong, and at 60-70% in Lanxi. In Guangdong, the operating rate was at 20-60%. Knitted fabric was poor while denim market seemed relatively good. In North China, the operating rate in Weifang reached 50-60% and the orders from schools reduced.

The imported cotton yarn arrivals in Aug-Oct are expected to be normal or a bit more, showing adequate supply, but there is uncertainty on demand side. At present, traders showed intention to raise prices, but the trades were hard to be done. Cotton yarn price now is hard to surge in short run as the stocks in the ports and domestic spinners are hardly consumed effectively, but it also has small potential to decline in one month as the sharp rise of forward imported cotton yarn lends support to spot one. As a whole, cotton yarn price will keep stable to strong in short term.