Feb'21 cotton yarn imports may move down 10.2% m-o-m to 141.6kt

1. Imported cotton yarn arrivals to China assessment

Since 2020, statistics of January and February are released aggregately, so there is no accurate import and export data in Jan and Feb singly. It is initially estimated that Feb arrivals of imported cotton yarn will reach 141.6kt, down by 10.2% on the month and 9.8% on the year. Chinese traditional Spring Festival came in Feb, which affected the arrivals and consumption of imported cotton yarn. Homecoming and returning to work of migrant workers also affected downstream demand and arrivals. As a result, the actual arrivals were assessed lower.

According to foreign shipment data in Jan, cotton yarn imports of China from Vietnam in Feb are estimated at 64kt; from India 20kt; from Pakistan 23kt, from Uzbekistan 16kt, from Indonesia 6kt, and from other regions and countries at 13kt.

2. Traders’ reflection

Note: Over 30 enterprises are surveyed, covering over 50% of cotton yarn imports.
Major traders and L/C issuing companies expected that Feb arrivals will be lower.　

3. Imported yarn stocks and supply and demand outlook in Mar

Trading sentiment on imported cotton yarn market was weak in early and mid-Feb, especially during Spring Festival holiday, the market was stagnant. In late Feb, market activities improved, but downstream weavers ran at a low rate and procured limitedly. In addition, traders pre-sold and delivered a lot of previous orders. Therefore, the stocks of imported cotton yarn were at a low level in fact. In terms of varieties, spot ring-spun cotton yarn was in tight supply in Feb, especially 32S, 21S and 16S; supply of siro-spun sources was tolerable and open-end one was adequate with slow sales.　

　

Looking from demand, the operating rate of fabric mills in Feb slumped due to Spring Festival holiday and it resumed quickly after the holiday. More workers in fabric mills than in spinners returned home, so weavers mostly resumed production after Lantern Festival and by end-Feb, the operating rate of weavers recovered to a bit higher than 60%.

Before Spring Festival, prices of spot and forward imported cotton yarn both weakened, especially those of forward Indian and Pakistani cotton yarn. Buying in China increased somewhat and the shipments were mostly in Mar and Apr. During Spring Festival holiday, international cotton price including US cotton and Indian cotton surged and the transactions in the world performed well except for China. After the holiday, forward imported cotton yarn price has moved up to high level and ordering in China increased a little, but due to high price, the purchasing was not much and the shipments were mostly in Apr-May. Therefore, arrivals in Mar were mostly ordered in Jan and early Feb in fact, and included some delayed cargoes. The costs of arrivals differed a lot. It is predicted that Mar arrivals will be a bit more than Feb ones.