Cotton consumption and demand for imported cotton yarn are both in a “shifting period”

The surge in China’s cotton yarn imports is mainly due to the price difference between domestic and foreign prices. This year, the source country of China’s imported spinning yarn has become Vietnam, and the proportion of low-count imported yarn has increased. , the import volume for the whole year of this year is forecast to be around 1.85 million tons (note: adjusted to 1.93 million tons in the fourth quarter). The fabric industry is currently in a particularly critical period, which is what we often call the “shifting period.” The “shifting period” can be understood from several aspects: first, the fabric industry itself is in a cycle of industrial structural adjustment; second, any sector in the fabric industry, including cotton consumption and demand for imported cotton yarn, is in a period of A “shifting period.” What has changed during this time?

In 2012, China’s cotton yarn imports increased by leaps and bounds, and the growth was explosive in the next two to three years. The usage of imported cotton yarn in Lanxi, Zhejiang Province was very representative. In Lanxi as a whole, more than half of the more than 500,000 tons of spinning yarn used a year is imported yarn. In 2015, the domestic import volume of pure cotton yarn was 2.345 million tons. The total amount of spinning yarn used in China was about 7.855 million tons, and the import proportion accounted for 29.85%.

In fact, there are many reasons behind the large proportion of China’s cotton yarn imports. Personally, I don’t think it is because China’s cotton yarn production is low and insufficient for self-sufficiency. China’s cotton yarn production is now about 6 million tons, and imports have surged after 2012. , mainly because of the price difference between inside and outside. After the roller coaster market, the price of domestic cotton dropped from a high level. During this period, some regulatory policies were introduced. The industry believed that the cotton market during this period was a “policy market”, which stabilized cotton at a high level and highlighted the price difference between domestic and foreign prices.

Everyone used to think that imported yarns were concentrated in the low-count range. In the early days, the main source of domestic imported yarns was actually low-count. The main source was Pakistan, and the proportion of imports was also large. Mainly because China and Pakistan have friendly relations, and other Pakistani import tariffs are also low, only 3.5 points. According to the proportion in 2012, the proportion from Pakistan reached 36%, and other countries were relatively smaller, such as India with only 20%, followed by Vietnam in third place.

There was a big change in the imported yarn market from January to July 2016, that is, it has been difficult for Indian cotton and spinning yarn to enter the Chinese market. The reasons are two-way: the price is too high, China cannot afford it, and Reluctant to buy because there are lower prices in China. Second, Indian sellers feel that the market price in China is too low, and the actual selling price in India can be higher than that in China. They are even exploring some markets outside of China.

This year, China’s largest source of imported spinning yarn has become Vietnam. There are many reasons: more than 80% of the output of Chinese companies investing and building factories in Vietnam is sold to China, which supports a certain volume. Second, the delivery time of products between China and Vietnam is relatively short. Third, the volume has increased a lot this year. Another reason is that the cotton used in Vietnam is mainly American cotton and African cotton. The cost of cotton in Vietnam is lower than that in India, so its price is still competitive in the Chinese market. .

Looking at the third quarter, the price of imported yarn has been inverted, that is, the foreign price is actually higher than the domestic price, and the import demand has gradually weakened, which is expected to affect the import volume in the fourth quarter. Judging from the customs data from July to August, the import volume is still quite large. It is understood that some downstream companies did not import in the first few months, but after the wave of rising prices in late June, companies participated, so the volume of imported yarn increased somewhat in the two months from July to August. Expected to slow down later.

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