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Yarn Market
J. Karl Rudy, Technical Editor

Spinners Ready To Fight

J. Karl Rudy, Technical Editor

S o here we are in a new year already. As they say, "Time flies when you're having fun — are we having fun yet?"

Spinners report a high degree of resolve about increasing prices of open-end (OE) yarns this year. This is due primarily to the increase in cotton pricing and the decrease in the number of rotors producing OE yarn. The balance between supply and demand has been lopsided for several years. With the continuing trend of closings and verticals getting out of the OE business, spinners are much more optimistic concerning an improved pricing structure. A spinner commented, "With today's pricing, there is no rhyme or reason for a vertical to make his own yarn." Another spinner said, "I hate to see people lose their jobs, but we need to balance productivity against demand." Yet another spinner, noting that his company's prices had increased, calculated that as of December, 4 million fewer pounds of OE yarn were being produced weekly.

To indicate the resolve of spinners to improve their pricing structure, one spinner said, "We are ready to fight it out this year. This is going to be a tough year. We just can't continue to absorb price increases as we did in 2000. Major increases are a must!"

Apparel Slow, Customs Blamed
While ring-spun (RS) yarn markets are still strong, they have slowed somewhat just recently. Part of the blame is laid to the confusion involving customs requirements under the CBI program. One spinner said, “CBI is definitely an area of strength, and the [U.S. Customs Bureau] is now ready! But the confusion with customs caused a slowdown in the apparel market.” He went on to add, “ Ring-spun yarn is not as strong as anticipated, due to losses in sales to yarn from Pakistan. Also, the fourth quarter is always slow for denim.” All of this adds to the weakness of RS markets.

Most spinners will tell you that markets are a mixed bag. That is, one market will show strength one week, but another will be strong the next week. Many spinners feel that 2001 will see more stable, more consistent markets with improved pricing. Optimism is tempered by a reality check by many who feel that we won’t know anything until we see how the markets respond after the holidays — possibly not until late January or mid-February.

Economy Won't Affect Textiles
One spinner, commenting about projections for 2001, couldn't contain his optimism, saying, "We are expecting a very - no - we are expecting a very, very, very strong 2001. The CBI has matured, verticals are getting out of yarn production and OE production is decreasing. Also, we have been pleasantly surprised at the strengths we have seen in the markets at this time of year. … We are running full and prices are up."

As an afterthought, he added, "The economy may not be as good, but good or bad, it really won't affect us that much. After all, during good economic times, customers buy the expensive items like cars, electronics, sound equipment and the like, but they will buy soft goods when times get tougher."

Virtually all spinners report that apparel markets have slowed considerably. Home furnishings have slowed as well.

Synthetic spinners report depressed markets. This, of course, is the time of year that these markets are usually slow. These spinners are also faced with pricing problems similar to those of cotton spinners.

A respondent from the cotton end of textiles reports that the adjusted world prices have gone up. This, along with the continued demand for cotton products by the general public, gives further justification to the argument that pricing will have to improve if we are to retain a domestic yarn industry. One spinner mentioned the fact that cotton was some 17 cents higher today than earlier last year, and that they were building that increase into their pricing.

There was still lots of cotton left to be harvested as of early December. South Carolina, California and West Texas, among others, were still bringing in the crop. The initial harvest in West Texas was reported to be of excellent quality; however, rains have damaged the remaining 3/4 of the harvest, resulting in a lower quality level. A harvest of some 17 million bales is projected.

And A Happy New Year, Too
The Yarn Market wishes each of you a Happy New Year, with great market conditions and an excellent bottom line.

April 2000

Related Files:
Download January 2001 Yarn Prices.