profits of imported cotton yarn traders will increase continuously as Chinese Yuan strengthens and cost of later arrivals reduces core spandex

Imported Vietnamese cotton yarn experienced much less losses than Indian one and as cost of Vietnamese cotton yarn traders declined from Nov 2018, it started to profit since end-2018. At present, cost of new arrivals of Vietnamese carded 32S for air-jet weaving reached 22,500yuan/mt with profits of 100-500yuan/mt. The profit is predicted to keep at around 500yuan/mt in the future.

Imported Pakistani cotton yarn saw large losses previously with the highest losses at 2500yuan/mt. It reduced to 500yuan/mt since end-2018. Currently, the cost of new arrivals of Pakistani grade A siro-spun carded 10S was 19,200yuan/mt with losses of 400-600yuan/mt. As cost of later arrivals falls, the profits will be restored gradually and recover to 300-600yuan/mt in one month.

On the whole, profits of imported cotton yarn traders will increase continuously as Chinese Yuan strengthens and cost of later arrivals reduces. On the other hand, although anticipation to macro economy improves and cotton price turns strong, it is still uncertain how long it will last. Amid sharp decrease of forward cotton shipments, if downstream demand gets poor, forward imported cotton yarn has potential to slide further. In long run, the wider price spread between foreign cotton and domestic one is favorable to imported cotton yarn. However, for downstream, the appreciation of Chinese Yuan will lower the competitiveness of textile and apparel export, which is unfavorable to demand for cotton yarn.