T he last Yarn Market column discussed the rather robust business enjoyed by some open-end (OE) spinners as a result of a thriving export business (See "Yarn Market" TW, May/June 2007). In large part, this was due to a substantial demand from buyers in Central America.

The story told by ring spinners, however, is not quite so positive.

"Our business has been very sporadic for the first half of the year," said one South Carolina specialty yarn ring spinner. "Looking back historically, I would tell you the first six months of our year are generally the strongest. And it just did not materialize this year. I think it is directly related to an overall weakness in the Central American textile market. The general yarn market for ring-spun yarns has been pretty sloppy for most of this year. And I think that shows you the importance of Central America to the US yarn industry. The weakness there has certainly had a significant impact on the demand for US ring-spun yarns. This contrasts to last year at this time, when it was so busy you couldn't find ring-spun yarn on the market. This year, I think most ring spinners would tell you their business has been off significantly."

"The business we expected to be there just hasn't materialized," added a ring spinner from Georgia. "We've had a few bright spots here and there, but in general, things have been flat."

While demand has been off compared to expectations for many ring spinners, a number of companies, especially the larger ones, are operating at, or near, capacity.

"We are operating at capacity," said an executive for a major Southeastern ring spinner. "And at this point, we're sold out for the balance of June. We will close for the Fourth of July — from the Fourth through the following Sunday, which is our traditional plant closing."

"Our primary concern has been the inability to sustain a positive order backlog," he continued. Going back to late January, when traditionally we would be about as busy as were going to get for the year, we have not been able to build a backlog. Our yarns are made to order, and the lack of a sustainable backlog makes it difficult to schedule. I guess the reality of the matter is that this is probably the way business is going to be from now on. It's been that way for a couple of years, but it seems it has been a little more pronounced this year. At the same time, we realize the reason we get business is that we are able to ship yarn faster to enable Central American garment manufacturers to get product to US retailers faster than they can get it from China. So it's kind of a mixed blessing for us. The short lead times enable us to get more business — but make it more difficult for us to run our business. We have to be smart enough to learn how to operate without a consistent order backlog. The key to our success is being able to run a complex business — and it is getting more complex. Orders are smaller. There is more pressure on delivery. Our customers won't take the risk of ordering product before they sell it."

  Ring spinners are not the only ones encountering a difficult 2007. Calls to several dye houses revealed that purveyors of dyed yarns are also struggling with weak market conditions.

“Every time we turn around, it seems we have another customer who is in Chapter 11, is closing up or moving offshore,” said one dyer. ”Others are sourcing in China and India.”

A North Carolina-based package dyer commented that much of the difficulty is because of an oversupply of dyers in the market. “We are all after the same piece of business — and a piece of business that seems to be shrinking.”

“We’re still running a five-day schedule,” he added. “For our large dye machines — 700 pounds and above — we could use a lot more business. Our smaller machines — 500 pounds and below — are inundated. Everybody is looking at inventory control and buying smaller increments. We may have a two-week backlog in large machines and a 12-week backlog in small machines.”

  So, it seems the first half of 2007 is coming to a close with mixed results for spinners. OE spinners with a pipeline to Central America seem to be running well. Ring spinners who were stretched to capacity last year at this time are seeing reduced demand — much of it as a result of decreased orders from Central America. And many of those companies that are relying primarily on US customers, like many of the dyehouses, continue to struggle.