Demand declines in China's domestic yarn market

01 Jan '14

2 min read

The downstream demand in China’s domestic yarn market has declined since December 15, and the situation is worse than that prevailing this time of the year in earlier years.

As the yarn market is very depressed, prices continue to show weakness, and a number of firms and some traders are planning to advance their holiday to January 10, 2014.

Downstream firms generally choose sourcing domestic or imported yarn, depending on the price difference. Under normal circumstances, the companies will choose to buy imported yarn if the price difference is more than 1,000 yuan/ton, and will choose to buy domestic yarn if the price difference is less than 1,000 yuan/ton.

At present, the actual transaction for 32 carded imported cotton yarn is at around 24,500 yuan/ton, while the actual transaction price for 32 carded domestic cotton yarn is in the range of 25,500-26,000 yuan/ton.

Similarly, the present actual transaction price of imported 21 combed bleached cotton yarn is at around 26,000 yuan/ton, while the price for the domestic variety is at around 27,000 yuan/ton. Thus, the price difference between imported and domestic yarn is close to or more than 1,000 yuan/ton.

Therefore, a relatively large number of textile mills choose imported yarn in their recent orders, which is a reason for lower demand in the domestic yarn market.

Although the price of yarn from India and other countries has risen, it is still lower than the price of the domestic yarn.

In the current scenario, taking into account such factors as cost advantages, some large-scale textile enterprises are planning to make investment overseas. For example, Huafu color spinning has announced US$ 136 million investment plans in Vietnam.

Fibre2fashion News Desk - India

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