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Yarn Market
J. Karl Rudy, Technical Editor

Cotton Season Interesting

By J. Karl Rudy, Technical Editor

T he jury is still out on how the cotton crop was affected by the combination of high temperatures, low rainfall and Hurricane Floyd. There is some concern in the industry as to staple length, particularly for the Delta cottons.

According to a respondent in this area, initial tests report that the staple length is somewhat shorter than normal for Delta cotton while the micronaire in most areas is above the base of 34. An exception in Memphis which is running slightly below the base at 33.6.

The demand for ring-spun yarns continues according to most spinners. So much so that one spinner said: “This market is stronger than I’ve seen it in years, and this holds true for both single and plied yarns. If this demand continues, I anticipate an increase in ring-spun yarn prices in the immediate future. As a matter of fact, we have already increased ring-spun yarn prices in certain cases.”

Still In Pits

The area of most concern to virtually every cotton spinner is the open-end (OE) yarn market.

The most encouraging note came from one such spinner who said: “At least the pricing for this product has not deteriorated any further and seems to have stabilized. Our volume is good for OE yarns but we are still looking for ways to make money from it.”

This is the feeling of many spinners of OE yarns. This spinner went on to say: “If we can get some of this low-priced cotton, we may be able to make some money next year.” Customers want a lower price now because cotton prices are low.

Cotton 101

Speaking of low-priced cotton brings up a point mentioned by many spinners when discussing this subject. Many customers and nearly none of the retailers realize the diversity of cotton in all of its physical properties. In other words, cotton isn’t just cotton.

For a spinner to get a commitment for the cotton he needs to produce his product, he must contract for the quality and quantity he needs well in advance of when he needs it. That essentially means he can’t go to the market place and buy the grades of cotton he requires today at any price. His commitment must be made at the time (and price) the grade is available. The cotton market isn’t like the yarn market where you as a customer can make a spot purchase at 30 to 50 cents off of the market price.

Start-Up Yarn

One spinner of open-end yarns said: “ There’s a category of yarn known as ‘start-up yarn.’ Now what I want to know is how can you make a start-up yarn for six months. If it takes you that long to start up a spinning frame, you better get out of the business now.”

He went on to say: “Some people in this business are getting pretty desperate. To show you how desperate — they will quote a small-volume customer the lower prices usually reserved for the large-volume buyer. They are essentially taking more business at lower prices in the hope of getting more business.

“I’m concerned, too, about the bankers who are in so deep to some of these mills that they are afraid to pull the plug, and the bankers I know are quite concerned about the condition of this industry. Some of these spinners cannot even service their debt, yet they continue to make yarn for spot sales.”

Apparently there are some spinners who only sell “Spot sales yarn.” Now if this is true and you are spinning nothing but spot sale yarns, it is not hard to explain the six-month sale of start-up yarn.

According to spinners, a lot of the T-shirt manufacturers have moved off-shore or to Mexico. A number of them felt this was a good move — for the yarn spinner. Of course, when they left, they took with them the yarn production they formerly purchased domestically.

Supply Problem Solved

The solution to the OE problem is pretty simple in the eyes of many spinners — Make less yarn! Until this happens the situation will only get worse.

Another major change will have to occur in the attitude of mill owners and managers which is “ make it and they will buy it.” Satisfy the law of supply and demand and you solve the problem.

p17_1797

November 1999




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