Nov cotton yarn imports may reach below 60kt

1. It is estimated that cotton yarn imports may reach 57.9Kt in Nov, down about 59.51% on year and down 1.53% on month

Cotton yarn imports reached below 100kt each month since the second half of 2022, and the sales speed in spot market slowed down greatly dragged by the weak demand for downstream traceable orders. The circulation period of imported cotton yarn lengthened, making overall Chinese ordering volume hard to break through. In addition to great fluctuation of exchange rate, speculative procurement demand reduced largely. Cotton yarn imports is still expected to be at low level. Cotton yarn imports is preliminary estimated at around 57.9kt, down 1.53% on month.

2. Proportion of Vietnamese yarn imports may continue to move up 

According to imported cotton yarn traders and company that establishes L/C, cotton yarn imports were mostly with multiple batches and few volumes in Nov. Low-count open-end yarn sometimes met big orders, and the producing origin was mostly Vietnam. Cotton yarn imports mainly arrived at port intensively in the second half of Nov, and some may delay to early-Dec, which was in accordance with Vietnamese Customs export data. Vietnamese yarn exported to China reduced from 50% to 48.6% in Oct, and totaled at 51.9kt. Excluding blended yarn, Vietnamese cotton yarn imports may reach around 36kt in Nov. The shrinkage of Pakistani yarn exported to China was sharper. The arriving inventory from Sep to Oct still waited for digestion with slow speed, and Pakistani yarn imports may reduce to around 5kt.

3. Supply and demand situation of imported cotton yarn

Supply and demand for imported cotton yarn were both weak in Nov. ICE cotton futures fell largely in Oct, and imported cotton yarn again ushered in ordering chance. However, most traders chose to reduce ordering or not to order as they were worried about the risk of exchange settlement cost. Imported cotton yarn inventory has gradually reduced to around 40kt. Vietnamese yarn imports may rise again in Dec when the ordering profit will tend better due to the falling of exchange rate. The increasing volume of downstream traceable export orders was not obvious, and medium and small-scaled fabric mills still lacked orders or held few orders. Besides, orders from Europe, Japan and South Korea chose to use Chinese cotton yarn to replace imported one due to its cost advantage, so the demand for imported yarn recovered slowly. In short term, the stocking before Spring Festival will bring price support to imported cotton yarn, but is not enough to push the market to go uptrend.