Imported Yarn Rises In Default, Buyers Are "Caught In The Dark"

According to Guangdong, Jiangsu, Zhejiang and other places of cotton yarn traders feedback, over the past week imported cotton yarn inside and outside quotation continued weak decline, India, Vietnam, Pakistan and other national combed yarn, OE yarn fell slightly larger than the high combed yarn (FOB, CNF price), especially the "not beautiful price is not cheap" India bonded yarn, futures yarn inquiry, signing, shipping is particularly unsatisfactory.

Some cotton yarn importers and middlemen have been on the brink of increasing pressure in recent years. On the one hand, they have fallen below 58 cents / pound with the ICE cotton main contract, and the price of cotton yarn CNF (or FOB) has dropped more than ever in Vietnam, India and Pakistan. The contract signed at 12/1 has become "hot potato". On the other hand, Zheng cotton has fallen below 11500 yuan / ton, and the downstream textile and garment enterprises have resumed their work and resumed production. The progress is relatively slow (the main consumer group of imported cotton yarn is small and medium weaving enterprises in coastal areas), and domestic cotton yarn is only a flash in the pan. Since March, a small diving mode has been opened. Up to now, OE yarn has been lowered by 200-300 yuan / ton, and the price of the ring combed and combed yarn has dropped by 300-500 yuan / ton.

Several factories and traders in Shandong, Henan, Zhejiang and other places indicated that many factors led to a marked increase in the default of imported cotton yarn contracts in the past 1 months, and the buyers partially cancelled the contracts, postponed shipment or even directly broke the contract.

First, the ICE cotton and Zheng cotton fell sharply, and the quotation of cotton yarn in foreign cotton mills is much lower than the contract price.

Two is the outbreak of the global outbreak of new crown disease. Transportation, trade and exchanges are affected to varying degrees. Cotton yarn production, shipment and delivery have also been delayed. Some factories are forced to default or postpone the 20-30 day shipment.

Three, the progress of resuming and resuming production of small and medium sized weaving and garment enterprises is much lower than expected; moreover, the light textile market is still half closed, and the demand for imported yarn is obviously increased due to the epidemic and crude oil price slump.

Four, with the US Federal Reserve cut interest rate +QE, the depreciation rate of RMB is very large. (March 12th offshore, offshore RMB against the US dollar, "break 7"), the cost of imported cotton yarn is rising, traders and cloth factories are a little annoyed.