Yarns Are Sending Mixed Signals But The Future Seems Bright

0, 0
0
200

Yarns are sending mixed signals. On one hand, you have a shortage in good quality cotton propelling cotton and yarn prices up. On the other hand, fabric prices are dangerously low pulling yarn prices down. Spinning mills and their agents and dealers are trying very hard, as always, to get better prices  from the markets but as soon as prices are raised, the buyers go into a shell and are willing to wait it out till prices drop again.

The garment sector is the one reeling with uncertainty. Be in weaving or knitting. The gap between combed and carded yarn is not what it used to be. Since the demand for premium apparel is at an all-time low right now, the demand for premium yarns has dropped too. Never have we seen carded yarn selling at the same price as combed but it’s happening now and will probably continue till the next festive season when consumers step out to buy whole-heartedly.

There will come a day when the massive pent-up demand will take yarn prices to a level never-seen-before when everyone will want a slice of the profit. I think that day is not far. There are already some green-shoots seen in some sectors:

1) Viscose yarn and fabrics used in making garments for women is seeing a healthy lift-off. Prices could have increased considerably but are under control since a lot of yarns are imported. However, even imported yarns are now higher by 5 cents per kg.

Also Read  GOTS Stays Committed To South Asia, Plans Virtual Events

2) Cotton sheeting fabrics are in huge demand which makes fine and superfine counts difficult to find now. Almost all the wider-width looms in India are packed till October and some even till December.

3) Demand from denims as well as sheeting has helped open end yarns sell well. Rapid bookings across the country have ensured prices are back at decent levels after seeing a historic fall.

Price Trends
Cotton prices are up, polyester fibre is trending up and so is viscose. Prices have been too depressed in all sectors that makes even a small increase seems like a surge. Cotton carded yarns have slowed after an abnormal rise.

  • 30s combed knitting yarn is up from Rs 170 ex-factory to Rs 176 ex-factory now. It’s considerable increase looking at the times we live in. However, I’m not sure whether this price will find support from buyers. There is not much evidence of it. A lot of merchant exporters are still taking deliveries of yarn booked at Rs 170 and Rs 172. They don’t have customers at Rs 176. And there is little chance the domestic market will support these prices. As soon as the domestic consumers find out that the exporters are out of the market at these prices, they would prefer sitting back and waiting for their preferred prices to be available again.
  • 60s compact weaving yarn over the last one month saw an increase of Rs 5 only to trickle back down. Same trends seen with 40s compact. The point where it will sell smoothly is Rs 250 exfactory but this isn’t the price spinning mills are happy with.
  • 32s carded weaving yarns are now below Rs 170 ex-factory.
  • There is a sudden spike in demand for open ends. Prices are up and so are the bookings. Good mills are booked till end of September. Primarily because of the denim sector becoming active again. Good quality 10s OE is selling at Rs 102 and 16s OE at Rs 110 exfactory.
  • 30s viscose yarn is trading at Rs 154 and is expected to touch Rs 158 before falling back again. Matters with viscose are precarious now with duties expected to be announced. Our government has been levying duties left, right and center on various products and industry-players expect even viscose yarns to be a victim soon. A lot of manufacturers in China are not offering yarns to India now for multiple reasons. There will be silence for a week if duties are announced but hopefully it will restore viscose to a premium category where it once belonged.
Also Read  PPE Stocklots Pile Up As HLL Halts New PPE Orders

Overseas price trends
Bangladesh is sending inquiries again. They had made their purchases for August in July itself and September to October are up for grabs now. Prices in China are still compressed. They refuse to accept higher prices from India. Border tensions have reduced but trade tensions are at peak. Europe and Africa are buying decent quantities.

  • 16s carded is selling at US$1.92 whereas 21s carded is at US$2.02. 21 combed knitting from Gujarat is at US$2.20.
  • 30s cotton knitting yarn was sold at US$2.35-US$2.40 levels to various markets and deliveries are still on. Exporters now quoting US$2.45 but there is no business at this price.
  • 10s open end is at US$1.33, 16s at US$1.55 & 20s at US$1.70.
Also Read  We Need To Learn Some Lessons From This Crisis

(Deepak Periwal is Founder & CEO, YarnLIVE)

LEAVE A REPLY

Please enter your comment!
Please enter your name here