cotton yarn and grey fabric inventory

In terms of cotton textile industry, the profits of downstream spinning mills are generally poor. The theoretical profits after a cotton price rise are negative, at around -800yuan/mt. For grey fabric producers, they bargain for lower cotton yarn prices. In addition, domestic demand is flat, but with coming slack season, mills also worry about the orders later. Grey fabric market demand remains weak, and export orders see no big improvement. Most players stand on the sidelines. In recent one week, cotton inventory in spinning mills decreased, while cotton yarn and grey fabric inventory began to pile up slowly. The downstream market is in a weak tone overall, so mills show weaker buying interests on feedstock. Currently, mills are not intended to purchase when cotton 3128 prices are at 12,000yuan/mt and above. That is to say, if ZCE Sep contract moves lower to 11,500yuan/mt and below, buying may increase somewhat.