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

More Yarn Market

A Transformation Story
November 23, 2015

Strong Close To 2015 Expected
October 13, 2015

Production Continues To Expand
September 22, 2015

Ring-Spun Continues To Be In Short Supply
August 18, 2015

Orders Strong; Capacity Expanding
July 19, 2015

Textile World Photo Galleries
November/December 2015 November/December 2015

View Issue  |

Subscribe Now  |


From Farm To Fabric: The Many Faces Of Cotton - The 74th Plenary Meeting of the International Cotton Advisory Committee (ICAC)
12/06/2015 - 12/11/2015

Capstone Course On Nonwoven Product Development
12/07/2015 - 12/11/2015

2nd Morocco International Home Textiles & Homewares Fair
03/16/2016 - 03/19/2016

- more events -

- submit your event -

Printer Friendly
Full Site
Yarn Market

Desperately Seeking Stability

Jim Phillips, Yarn Market Editor

After a year of up-and-down business conditions — a period that followed one of the most sustained up cycles in recent memory — the yarn market seems to have stabilized, at least for the short term.

Spinners and brokers report a steady stream of orders, with pipelines beginning to fill and delivery dates beginning to move out. The reasons for the year-long uncertainty in the business were multiple, according to many industry insiders and observers, who now hope for a sustained period of stability.

"Coming off such a crazy period, the market was in complete disarray," said one observer. "Many customers, fearing product shortages, overbought. Through a combination of factors, cotton was in short supply and the price increased to record levels. Then, we all quickly came crashing back to earth."

Cotton prices began to drop precipitously, and many spinners were left with inventories of high-cost raw materials that were suddenly worth a lot less in the marketplace. Orders stopped coming as customers became concerned about the volatility of pricing. Retailers were left with a glut of product that, in still-difficult economic times, was not moving off the shelves as quickly as they would have liked. "In the end," said one spinner, "we moved from feast to famine almost overnight."

Hopes are high in the industry that all of these issues have finally resolved themselves. "There was a necessary inventory correction," said one industry insider. "A lot of customers purchased more than they needed when yarn was in short supply. We expected a correction to last a few months and, instead, it lasted the better part of a year. Also, there remained a tremendous amount of uncertainty about prices. Both spinners and customers were caught out in the last cycle, and there was a lot of hesitancy to go down that road again."

Over the past few months, the price of cotton has stabilized at levels close to where they were before the boom cycle. Whatever inventory correction occurred seems to have run its course. "I was in a major retailer's store the other day, and there is not a whole lot of selection on the shelves right now," said one observer. "This tells me that retailers are only stocking that inventory they absolutely have to have."

Prices Of Imported Yarns Going Up
Along with the domestic market factors, another reason for the recent increase in U.S. orders is the pricing and availability of imported yarns. Commented one yarn broker: "Prices for imported yarns are increasing and delivery times are moving out. It is going to take you eight weeks to get it, if you can even get it then. It may be 10 weeks. I just brought in two containers. The one that hit the dock last week was two weeks late. The one that hit the dock this week was three weeks late."

Added a spinner: "A lot of customers are starting to return programs to the U.S. The prices are higher, but there is not as much difference as there was just a short time ago. And delivery can be a lot faster."

A yarn broker said: "When customers take delivery of imported yarn, they think they can reorder at the same price, but they can't. Prices are going up, and when companies in Asia can't get the prices they are asking, they stop selling. India and Pakistan have stopped shipping recently because they can't get the prices they want."

He continued: "Retailers are talking about bringing programs back to the U.S. Of course, they've been saying that for the past eight years. But some of the programs I've recently quoted on are the first times somebody has seriously inquired on 200,000 or 300,000 pounds in a long time. And, there are people I've tried to call on for the past year, who haven't returned my calls. They are calling me now."

Ultimately, spinners are hoping current market conditions will loosen pricing pressures and allow them to begin selling at a reasonable margin. "It sounds like a broken record," said one spinner, "but there is still a lot of pressure on pricing. Customers don't want to pay the prevailing price, and mills can't sell at the price customers want to pay. At some point, this cycle is going to have to break. And, I think it's one of those things that, when the first big customer realizes that they are going to have to buy at the market price, a lot of others will follow. It is then, I think, that we can say the market has truly stabilized."

September/October 2012


Related Files:
Click here to download current yarn prices