Cotton inventory in spinning mills has been at a multi-year low

As the cotton transportation and arrivals of new cotton is impacted by the epidemic, cotton inventory in spinning mills has been at a very low level, and spinners have to purchase high-priced cotton. But downstream demand is hard to support the yarn prices. After the National Day holiday, cotton yarn and grey fabric sales weaken, and yarn prices slip. Based on cotton price of 16,300-16,600yuan/mt in inland warehouse, cotton yarn sees a loss of about 700yuan/mt. Some spinners are unable to purchase the high-priced cotton in inland warehouses, and have to purchase Xinjiang cotton, waiting for the transportation. Under such condition, some spinners have already cut operating rate, overshadowing on cotton consumption. For late market, with the multiple outbreaks of epidemic, spinners are not very optimistic about the end-user consumption.