According to Chinese customs statistics, China’s yarn imports in 2016 were US$7.39 billion, down 16.9% year-on-year, of which pure cotton yarn imports were US$5.13 billion, down 19.5% year-on-year, and import volume was 1.557 million tons, down 12.7% year-on-year. It is worth noting that since 2016, exports of blended yarns (mainly polyester-cotton, polyester-viscose, cotton-viscose, etc.) from Indonesia, India, and Vietnam to China have continued to rise.
The FOB, CNF and CIF quotations of Indian cotton and cotton yarn remain high (due to the continued strength of the Indian rupee against the US dollar, the ex-factory prices and shipping date prices of S-6, J34, MCU5 and other ginneries hit new highs in late March). Exporters and traders even had no inquiries or transactions for May/June futures yarn orders for 2 or 3 consecutive weeks. Therefore, Indian textile companies were forced to increase their blended yarn operations. The amount of bonded polyester-cotton, polyester-viscose and other blended yarns at ports in Guangzhou, Ningbo, Qingdao, Zhangjiagang and other places is increasing, and the proportion of bonded yarns is also increasing.
According to statistics from relevant Indian departments, from April 2016 to January 2017, although India’s cotton yarn output fell by 2.2% year-on-year, due to some yarn mills switching to blended yarn production (blend yarn output increased by more than 6%), the total yarn output was not only It remains stable with slight growth, but the current proportion of pure cotton yarn still reaches about 71.4%. At present, Pakistan’s domestic cotton inventory has reached a low level. Pakistan’s cotton prices have risen with the recovery of New York futures prices. Coupled with the current decline in polyester staple fiber prices, Pakistani textile companies have begun to adjust their product mix and shift from pure cotton to blended textiles.
At present, T65/C35 21S, T65/C35 30S, T60/C40 30S, T65/JC35 21S, T65/JC35 32S and other varieties from Indonesia and Vietnam, which are traditional blended yarn export powers, are gradually pouring into China. In comparison, the leading varieties of Indonesian yarn mills have higher yarn counts, such as T65/C35 45S, T65/JC35 32S, etc., while blended yarns from India, Pakistan, Vietnam and other countries are mostly concentrated in 32S and below.
So what are the advantages of imported blended yarn? Why should we be wary of the impact of imported blended yarn on China?
1. Since China rolled out a large amount of reserve cotton in 2016 and 2017, and the actual transaction price was significantly lower than the spot price of new cotton, the effect of “reducing costs and increasing competition” by spinning mills was obvious (such as the average daily transaction volume of reserve cotton since late March The price has been officially set at 14,600-14,800 yuan/ton, which is nearly 1,000 yuan/ton lower than the new cotton in 2016/17), forming a strong impact and resistance to the import of cotton yarn from India, Pakistan, Vietnam and other countries. However, the price of imported cotton yarn can be reduced in terms of cost, transportation, taxation, etc., and the compressible space is very limited, so it is inevitable to switch to blended yarn.
2. Affected by the recent sharp decline in crude oil, PTA, and 1.4D polyester staple fiber, spinning mills have reduced the financial pressure on raw material procurement while avoiding the impact of some small spinning mills in Bangladesh and Central and Southeast Asian countries. Large mills such as India and Vietnam have , brand factories have unanimously expanded the production of blended yarns, and at the same time increased pre-sales to buyers in China, Bangladesh and other countries.
3. Since cotton mills in Indonesia, India, Vietnam and other countries mainly use American cotton, West African cotton, Central Asian cotton, etc., the cotton is significantly stronger than the reserve cotton in terms of length, breaking strength, color grade, foreign fiber content, etc., so Some Chinese weaving factories and middlemen believe that the indicators of imported polyester-cotton 40S and below yarns are stronger than domestic yarns.
4. Imported blended yarn has a slight price advantage, but there is still room for price reduction. For example, the current prices of domestic T65/C35 45S and T65/JC35 32S are generally 18,600-18,800 yuan/ton and 18,800-19,000 yuan/ton, while the prices quoted for Indonesian and Indian yarns after customs clearance are generally 200-300 yuan/ton lower than domestic yarns. Compared with the “upside-down” price of cotton yarn at home and abroad of more than 1,000 yuan/ton, imported blended yarn should have more room.
</p
