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Yarn Market
J. Karl Rudy, Technical Editor

Ring-Spun Yarn Sales Fantastic

By J. Karl Rudy, Technical Editor

A brief comment from a respondent involved in raw cotton markets will be encouraging to spinners: "The cotton crop looks beautiful this year, even with the drought. A large crop is anticipated and the quality is good. Prices, however, don't look good." In other words - bad news for farmers, good news for spinners. As with just about everything in this business, it's not over 'til it's over. So we'll see how it looks a couple of months from now.

The markets for ring-spun yarns are causing exuberance, to say the least, among spinners. One spinner said, "Ring-spun markets are fantastic in all counts and all market segments." Another whole-heartedly agreed saying, "Ring-spun markets are excellent - really tight!" Now, the question is, how long will it be until everyone moves to these markets and saturates them as we have done in the open-end (OE) markets?

Spinners of ring-spun yarns are confident that the market is strong enough to see an improvement in pricing. A spinner commented, "We will start moving prices up - the market can take it. We are running full, but are still far behind. We have no inventory, and we are booked solid through the third quarter. I wish we could have run through the fourth."

Several factors have contributed to the continued excellence of markets for ring-spun yarns, according to spinners. As one said, "Denim is back. Docker twill is back." As you know, both of these markets use tremendous quantities of yarn.

Opportunities Abound

"Open-end yarns, however, give us many opportunities in outerwear, underwear and T-shirt markets," commented one such spinner. Despite the lackluster market conditions, most OE spinners are running full and booking ahead. One spinner informed the Yarn Market that he was booked solid for the rest of the year and was beginning to book first quarter 2001. He said, "Of course, we are quoting higher prices for next year, but we will never see inflated prices again. All we want to do is make a reasonable profit - something we haven't done in several years." He also said that once they got through the current contracts, prices will probably improve.

Many spinners feel the OE markets will always be tough because no one is getting out of it. Therefore, the oversupply of OE yarns will continue. "It's funny," said one spinner, "the spinners who complain most loudly about pricing in the OE markets are the same ones who are selling low." In spite of it all, volume remains good for these markets.

Inventories are strictly controlled, according to virtually all spinners. As if to justify more than their standard of two-week inventory, one spinner said, "Of course, when you run so many products, you have to maintain a stock of your basic items."

South Of The Border

The Yarn Market received some interesting comments from spinners concerning the Carribean and Mexico. One spinner observed, "While spinners will probably benefit, those textiles which are labor-intensive will move offshore." Yet another spinner commented, "I think the CBI will be good for us as long as it lasts, but a couple of large producers could eat up the quotas. Also, a company must get positioned beforehand and be able to identify the players. The logistics could be a problem, such as credit and freight. Those who capture the market will profit the most." This same spinner (discussing NAFTA) said, " Those manufacturers already involved in Mexico are beginning to question their position, feeling they must supply the local market rather than ship the goods back to the USA." Shipping costs are apparently part of the problem.

Weavers are having real problems with synthetic fabrics. As one weaver said, "It's a struggle every day." In cotton and poly/cotton goods, volume is good, but margins are terrible. Doesn't that sound familiar to you spinners?

The Good Old Days

A spinner reminisced, "Way back yonder, we had peaks and valleys in our earnings report. Today, it is all valleys. We need to climb a peak and start making a profit for a change. Seriously, I think the future for spinners looks good, at least for the near future." He was reminded that back in the old days, we came out of the mills covered in so much lint that we never had a problem with dry hair days. Who wants to go back to the good old days?

Yarn_Table_37

August 2000




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