Home    Resource Store    Past Issues    Buyers' Guide    Career Center    Subscriptions    Advertising    E-Newsletter    Contact

www.langligon.com
http://www.textileworld.com/partners/Shaffer_and_Max-Dyeing_and_Finishing_Plant_2014
http://www.itmaasia.com
http://www.allstatestextile.com
http://bit.ly/QryKcX
http://www.spgprints.com
http://www.textileworld.com/forms/newsletter.html
http://www.textileworld.com/Store/Books/index.html
March/April 2014 March/April 2014

View Issue  |

Subscribe Now  |

Events

12th International Exhibition on Textile Industry (Indo Intertex 2014)
04/23/2014 - 04/26/2014

Smart Fabrics & Wearable Technology 2014
04/23/2014 - 04/25/2014

InDIGO-3
04/24/2014 - 04/26/2014

- more events -

- submit your event -

Printer Friendly
Full Site
Yarn Market

Orders Still Scarce; Little Improvement Anticipated

Jim Phillips, Yarn Market Editor

As of mid-November, yarn spinners report a continuation of the sluggish business conditions that have largely existed since mid-year. Holiday orders were well below expectations for several spinners, and prospects for improvement seem to be somewhat slim for the immediate future.
"We haven't seen any real significant change in our business over the last couple of months or so," said one spinner. "We've seen little periods of activity here and there, and we thought some business was going to pick up, especially in the area of specialty yarns, but that really hasn't materialized. Any improvement we've had seems to be in little spots and of brief duration, and is, obviously, related to our supplier inventories."

Said another spinner: "There still seems to be a significant amount of inventory that knitters and weavers are working their way through — inventory that was purchased earlier in the year in anticipation of limited yarn availability. As business at retail began to dry up somewhat, a lot of our customers ended up with more inventory than they needed."

Further complicating the current situation, one spinner noted, is the sustained drop in cotton prices since the second quarter of the year. Many spinners are still producing yarn from higher-priced fiber they purchased back in July. "I believe that, with the inventory situation, some of the bigger brands began looking to the future and seeing significant price drops," he said. "I believe they're waiting to place orders until yarn prices come down to where they believe they should be. And yarn spinners are in much the same situation. The truth of the matter is that we have inventories of high-dollar fiber and are still working our way through it."

A Perfect Storm Of Conditions
Business is not only slow for U.S. spinners, but is also weak for much of the Western Hemisphere. "A lot of our business is in Central America," said one spinner, "and that business has been very weak for some time. I believe excess inventory for our customers and at retail is a significant contributor to this.

Another spinner said: "Our business has been slow since August. I think it's directly attributable to the high cost of in-process material, whether yarn or finished fabric, as well as the generally weak conditions at retail. I don't think the business at retail was as strong as it appeared to be, and not nearly as strong as we had hoped it would be. The combination of high inventories and weak demand, coupled with the lower cost of new crop cotton, has created a perfect storm that has prompted U.S. retailers to delay purchasing."

Cotton Prices Continue To Fall
As numerous spinners mentioned, a significant disconnect exists between the existing spot market price of cotton and the cost of raw materials they currently have on hand. For example, many spinners are still working with cotton they purchased in July or earlier. On June 17, base quality of cotton in the seven designated markets measured by the U.S. Department of Agriculture averaged $1.5043 per pound. As of November 10, that price had fallen to $0.9534.

"I think it's going to be slow going until domestic manufacturers get to the point where yarn prices are in line with current raw fiber prices," said one industry observer. "That's going to require one of two things: U.S. manufacturers can decide to just weather the storm until their higher-priced inventories are diminished. Or they can adopt a fire-sale mentality and drop prices just to move inventory. In reality, neither is the optimal solution."

No doubt, 2011 has been one of the most topsy-turvy years for yarn spinners in recent memory. Next issue, Yarn Market will review 2011 and offer a look ahead to what spinners expect in 2012.

November 2011

Advertisement

http://www.staubli.us


Related Files:
Click here to download current yarn prices