Imported yarn stocks and supply and demand outlook in Nov

2. Traders' reflection

Note: Over 30 enterprises are surveyed, covering over 50% of cotton yarn imports.

Major traders and L/C issuing companies reported more arrivals of imported cotton yarn in Oct.

3. Imported yarn stocks and supply and demand outlook in Nov
In Sept-Nov, arrivals of imported cotton yarn averaged at 150-160kt, mainly benefiting from the expectation to peak season and recovery of traders’ profits after Sept. In Sept-Oct, the market demand was tolerable and traders destocked well, with some varieties even short of supply. But since Nov, downstream demand weakened obviously and sales of traders turned more slowly. As the arrivals increased, stocks of traders moved up. Most of the stocks need to be cleared before Spring Festival, which may weigh on the price. In addition, RMB appreciated over 1000 points and the ordering cost declined 300-400yuan/mt. Adding the reserved profits room when ordering, traders saw improved profits. Amid poor demand, rising stocks, improved profits and coming Spring Festival, traders may be more willing to keep the profits at hand. If there is no impact from cotton price and macro factors, price of spot imported cotton yarn is likely to weaken later, but due to rising cost and better expectation, there is limited downward room.