Ring Spinners Optimistic About New Year
Jim Phillips, Contributing Editor
Another spinner agreed: "I've gotten business because I've been 10 cents low and then lost business because, at the same price, I've been 15 cents high. You see this when there are big shifts in cotton prices. Ring prices are down maybe as much as 10 or 15 cents since last fall, but cotton is up 10 or 15 cents. There is a wide span there and it has taken some time for correction."
Inventories Down, Prices Unstable
The shift in the market resulted in increasing inventories and falling prices for US spinners. “I think everyone miscalculated how long this downturn was going to last,” said one large spinner. “By the end of the second quarter, most of us had a lot more inventory than we expected. It’s taken almost all of the second quarter and most of the third for us to get our inventories under control. We are starting to see some pick-up again in the ring business. Our shipments are up some. I am giving some deliveries that are out a week or two, which has been unusual. Typically, if you didn’t have it on the floor, you didn’t get the order. Now people are starting to wait. That’s a sign, I think that inventories, at least in most of the counts, are down. And you are also seeing a wide range in prices.”
Another spinner agreed: “I’ve gotten business because I’ve been 10 cents low and then lost business because, at the same price, I’ve been 15 cents high. You see this when there are big shifts in cotton prices. Ring prices are down maybe as much as 10 or 15 cents since last fall, but cotton is up 10 or 15 cents. There is a wide span there and it has taken some time for correction.”
In fact, say several ring spinners, it is the disparity in prices that is among their biggest concerns. As cotton prices have generally increased throughout the year, ring spinners have been unable, for the most part, to pass those increases through to their customers.
“We’ve been able to get some of our smaller customers up,” said one, “but we haven’t been able to even budge the large-volume customers. There’s a lot of resistance to price. I’ve sold some 30-count at $1.70 and I’ve lost some at $1.50. It’s all over the board. Pricing is very difficult right now. You don’t want to lose the order, but you don’t want to give it away. You want your supply chains to be competitive, but spinners can’t take all of the fluctuation. The chain has to absorb part of it — if we are going to survive. The entire chain has to get better about reacting to these up and down moves.”
Most spinners have reduced inventory through the third quarter by reducing production schedules. However, even though business seems to be picking up somewhat, they do not anticipate altering traditional holiday schedules.
“We had been given some information that led us to believe the fourth quarter would be really strong, but that hasn’t really happened,” said one ring spinner. “It’s gotten better, but it hasn’t gotten has strong as we expected it to. We do feel like the first quarter is going to be better. But I don’t think we will run through Christmas. We will likely keep to our traditional schedule and hope we can respond aggressively to a strong first quarter.”
October 9, 2007