Mar’22 cotton yarn imports may move up 53.1% m-o-m to 143.3kt
1. Imported cotton yarn arrivals to China assessment
Cotton yarn imports of China in Mar 2022 is estimated at 143.3kt according to initial survey and Feb exports of major origins, down 31.58% on the year and up 53.1% on the month. The sharp monthly increase in Mar mainly lay in less orders placed by traders and delayed shipment in Feb due to Spring Festival.
According to export data of major import origins in Feb, China’s cotton yarn imports from Vietnam is estimated to increase by 59.4% on the month, while that from India to increase by 19%. After Spring Festival, Indian cotton yarn once hit high, but due to weak buying and fall of cotton, it slumped and attracted more traders to place orders, so China’s imports of Indian cotton yarn in Feb was cut largely. As for Pakistan, China’s imports of Pakistani cotton yarn rose by 5.35% in Feb, and with lacking of ordering opportunities, only a few traders replenished when the price fell later. Arrivals of Uzbekistani cotton yarn are predicted to increase largely compared with the first two months as the arrivals originally planned to reach China in Jan and Feb came in Mar. The imports from Indonesia and Malaysia is predicted to be a bit more. Based on the above assessment, Mar cotton yarn imports of China is possibly to rise much from the four major exporters. It is initially estimated that cotton yarn imports of China in Mar from Vietnam is at 77kt; from Pakistan 15kt, from India 10kt, from Uzbekistan 22kt and from other regions 13kt.
2. Imported yarn stocks declined slightly.
Downstream orders and consumption were dull in Mar. The weavers did not receive new orders, and export orders also did not improved. Since mid-Mar, the pandemic in China has intensified, making imported cotton yarn trading more difficult. The destocking of traders moved slowly.
3. Downstream operating rate declined continuously, and new orders were scarce.
According to downstream consumption, imported cotton yarn market will maintain dull in the first half of 2022. Since mid-Mar, the pandemic in China has intensified and the control and prevention measures on the pandemic turned stricter. Amid the soft sales, the inventory of weavers accumulated. On the other hand, with stagnated logistics, the weavers could not deliver goods normally. It is predicted that production cut will be normalized this year.
In conclusion, forward imported cotton yarn price kept higher than spot one since Q4 2021, and the high-priced cotton yarn restrained downstream consumption increasingly. In Mar 2022, imported cotton yarn arrivals are predicted to increase on the month, and it is mainly due to the long holiday in Feb. Apr arrivals are expected to be less than Mar one.
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