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Yarn Market
J. Karl Rudy, Technical Editor

Open-End Yarn Prices Increasing

J. Karl Rudy, Technical Editor

W ell, here we go again! Cotton prices are up, and rayon fiber producers have announced an increase in their prices due to increasing costs of caustic. Acrylic producers have warned spinners to expect a price increase due to increased prices of natural gas. Now, finally, open-end (OE) spinners have begun to ask for increased prices for their products. One such spinner commented that the OE markets were changing rapidly. He added, “ This price increase has been somewhat of a shock to our customers, but they seem to understand. However, only time will tell if the retailers will accept it. One thing is certain — we can’t continue to run our mills and lose money. Our OE customers are quite optimistic for the first quarter and some have booked well into the second quarter.” So, everything is not doom and gloom.

Concerning the comment above about customers understanding the price increase, several respondents have said something to the effect, “Yeah, I understand, but when it comes to the bottom line will I accept it (the price increase)?”

Ring-Spun Markets Slow
Ring-spun (RS) markets have hit a slowdown, according to some spinners, although the demand for yarns for the denim trade remains good. Apparel markets for those products are reported as spotty. Spinners and their customers, however, remain optimistic for the immediate future mainly because of the last-minute surge of retail customers during the holiday season and the continued strength of the denim market. Future business for RS yarns depends in part on the ability of the retailer to move his inventories. The slowdown of RS markets did not effect all spinners because, as one spinner said, “Ring-spun markets are up moderately, open-end yarn markets are up considerably, prices are firming up daily, and our customers’ yarn supplies are down. Raw material costs are up, but overall things are looking up.” Isn’t it good to hear a positive report once in awhile?

Synthetic spinners are definitely less than happy with their market conditions. When asked about market conditions, one commented, “Market conditions are lousy! However, we are optimistic for the first quarter — traditionally the first half is better in our business. Children’s sleepwear business is improving, but right now automotive sales are way off and home furnishings are pretty soft. Recently, we have noticed some shrinkage in business for cotton yarns, which should help those of us in synthetics, but 2001 is going to be a tough year for synthetic yarn sales.” He went on to say that his company had things in place before the end of the year to assure a better first quarter. However, he didn’t say what those things were, but he anticipated a solid five-day work week for all of his plants.

Weavers report that the first quarter “looks promising.” There was some curtailment during December, but weavers are planning a full five-day operation for the start of 2001. Like spinners, weavers also report that long-term business has shrunk, making it very difficult to plan their operations. They also have similar pricing concerns. One weaver said, “Frankly, our customers are not interested in a price increase and they will definitely resist such a move.” As one spinner said, “Time will tell.”

Texturizers Concerned
Texturizers report that prices may actually drop because of imports. Interestingly enough, the imports they refer to are not fibers but garments. Currently, markets for textured yarns are quite soft and projected to stay that way through most of the first quarter. First quarters are traditionally slow for texturizers, but improvement will depend on how retailers move their inventories.

As one texturizer observed, “If retailers move their inventory, business for us will improve. Domestic capacity is nearly balanced with demand, but the imports from Asia upset that balance.” Asian production of textured yarn and garments made from those products greatly exceeds the demand there, according to reports from texturizers. That over-capacity is exported. It doesn’t seem fair, does it?

It may not seem fair to those affected, but one respondent to the Yarn Market this month reported that domestic fiber producers are running full. They can do that only because they are exporting fiber. What’s the expression? What’s good for the goose is good for the gander.

One thing you have to say about people in the textile trades, especially sales — they are always optimistic!

February 2001

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