Spun yarn prices may be more stable in the coming weeks in China after suddenly falling 700 to 1,200 yuan per metric ton in November. Demand remains very weak with increasing inventories at spinning mills after production further rose 6.6% in October. Raw material costs however stopped declining, offering an opportunity to maintain prices at their new levels.
 
Cotton yarn prices were more stable in the past ten days in China, in line with a rebound in cotton lint prices on the domestic market.

Compared with their level two weeks ago, prices continued drastically falling, mainly due to a sharp decline in the first days of the period.

In Qianqing (Zhejiang), the price decline ranges from 100 up to 1,100 yuan.

In West Liaoning, combed cotton yarns were down between 300 and 1,000 yuan depending on counts.

Prices however stopped falling in the past ten days.

Low Demand and Rising Stocks

Demand remains very low from downward processors.

Cotton fabric producers are themselves confronted with falling prices and a low level in orders.

The knit apparel industry is also facing serious difficulties with a slowdown in exports in the past months.

Cotton yarn inventories are therefore piling up at spinning plants in China.

The domestic production continues rising, even if not so sharply than a year earlier.

Total spun yarn output was up 6.92% in October from the same month in 2007, at 1.86 million metric tons.

Polyester spun yarns started also stabilizing in the past seven days, although still slightly decreasing.

Over the last two-week period, the decline reached 400-600 yuan per ton (8 to 11 cents per kilo) in Qianqing.

In Changyi, PSF yarn prices fell 400 yuan over the last fortnight.

Waiting for March

Viscose prices were also on the decline in the last two weeks in line with a sharp decrease in viscose staple fibers.

VSF prices may however less decline in the short term and spun yarn prices may follow the same trend.

The spun yarn market is possibly finding a new price level in China after a sharp fall of about 700-1,200 yuan in November.

Spun yarn producers may try to maintain the prices at such a level until the textile production is expected restarting in next March.

 (Source: Emergingtextiles)