Raw materials prices spike amid reduced supply of combed noil

Open-end cotton yarn price has moved up by 500yuan/mt since early May, and many mills intend to adjust up prices further. It mainly lies in the sudden rise of raw materials price. From the chart, it shows that cotton price rocketed from last Oct, but combed noil only increased slightly at that time, so their spread widened quickly and then stayed high. After May Day holiday in 2022, combed noil jumped from just over 15,000yuan/mt to over 17,000yuan/mt with an increase of narly 1500yuan/mt. The sharp rise of combed noil is mainly contributed by less supply. So far, many cotton yarn mills are still in production cut or suspension, and some combed cotton yarn mills shift to produce carded one due to poor sales. On the other hand, it is heard that a combed noil warehouse in Xinjiang caught a fire during Labor’s Day holiday, and over 10kt of combed noil stocks were damaged. That is to say overall supply reduction pushes the surge of price. Currently the price spread of cotton and combed noil has fallen back to normal level.