Polyester/cotton yarn in trouble on falling raw materials 100% merino wool yarn

Polyester/cotton yarn has been advantageous in yarn market since the second half of 2018. The sales were good favored by active export demand, and later it declined affected by China-US trade war but overall operation was healthy. However, it turned harder to be sold due to soft end-user demand and the price slumped quickly after a period of stabilization. Meanwhile, the inventory in the mills climbed up obviously. According to downstream, polyester/cotton yarn sales stagnated apparently.

Firstly, the impacts from China-US trade war and adjustment of VAT rate. Export demand for polyester/cotton yarn keeps active in most of time and is mainly concentrated on Southeast Asia. Affected by China-US trade war, the demand improved obviously in 2018, but slid in 2019. The decline of VAT rate in Apr increased the cost of export, which also restrained the exports. Many mills were hesitant facing the new VAT rate and the operation seemed more difficult.