Yarn Market: Ring-Spun Continues To Be In Short Supply

By Jim Phillips, Yarn Market Editor

Yarn sales in the United States remained strong through mid-August, with ring-spun cotton in particularly high demand.

“Positions in ring-spun yarns are hard to come by,” said one yarn broker. “There simply is not enough capacity in the United States and the western hemisphere to fill current demand.”

Spinners agreed. “Ring spun continues to be strong,” said one spinner. “We have a healthy backlog of orders and are running a full schedule.” Added a yarn broker: “With the difficulty in getting positions in ring-spun yarns, there is an opportunity for some customers, especially smaller ones that are not going to order 50,000 pounds at one to time, to move to open-end yarns, man-mades and blends. Since ring-spun began getting tight several years ago, we have noticed a definite uptick in demand for blends.”

Spinners are generally optimistic about the remainder of the year. “We have been in a period where business has been good for a long time. We have to look back almost three years to remember times when we had to really scramble for orders. The U.S. economy, at least for now, continues to improve, more people are working and wages, finally, are beginning to show some growth again. Unless there is an unexpected derailment in the economy, I expect the rest of the year to be really good.”

TPP Continues To Cause Concern
The Trans-Pacific Partnership (TPP) continues to be a cause for concern for many in the industry. “A real problem is that we just don’t know right now exactly what is in it,” said one industry insider. “No one does. The central issue for the U.S. industry is the desire by Vietnam to join the partnership without a yarn forward rule. This would open up a floodgate of yarn from China and could, ultimate, decimate the textile industry in the United States.”

Another executive agreed. “The TPP without a yarn-forward rule would wipe away in a heartbeat all of the progress the U.S. industry has made in the past decade. But, even with the yarn forward rule, TPP is a bad idea for U.S. manufacturing. It is just a way to ship business and jobs out of this country. Ultimately, the government will be doing what it always has — throwing the textile industry under the bus.”

Added another industry insider: “The only problem for yarn spinners with the TPP is Vietnam, which is the second largest apparel manufacturer in the world. We have relationships with almost every other country involved. Vietnam wants to get into TPP because of textiles, but only wants to be a part of the partnership under ‘single transformation,’ which means the yarn in Vietnamese fabric and apparel can come from anywhere in Asia, and that means predominantly China.”

Cotton Prices Stable
Cotton prices in the U.S. market continue to hover in the low 60-cent range, as has been the case for more than year. Average spot cotton quotations the base quality of cotton (color 41, leaf 4, staple 34, mike 35-36 and 43-49, strength 27.0-28.9, uniformity 81.0-81.9) in the seven designated markets measured by the USDA averaged 60.94 cents per pound for the week ended, August 13, 2015. The weekly average was down from 61.25 cents last week, and 63.88 cents reported the corresponding period a year ago. Daily average quotations ranged from a low of 59.36 cents Tuesday, August 11, to a high of 63.61 cents Thursday, August 13. The ICE October settlement prices ended the week at 67.15 cents, compared to 63.50 cents the previous week.

August 18, 2015

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