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Yarn Market
J. Karl Rudy, Technical Editor

Changes In The Wind

J. Karl Rudy, Technical Editor

T here are many discussions this day and time about the numerous exhibitions covering the many facets of the textile industry. One respondent to the Yarn Market this month brought up the subject by saying, "You know, we have been going to the Hosiery Show in Charlotte for many, many years. In all those years, we made one significant sale to a company which has resulted in a long-time relationship. But those shows cost a lot of money, and we simply can't afford to spend our hard-earned money on shows that give us so little return on an investment. It's just ridiculous. You remember the textile showrooms various companies used to have in New York? They don't have them anymore. I heard that the tufted rug folks had a good show a couple of weeks ago, but nothing counts in this business until someone buys."

You are all aware that ATME-I, held every four years in Greenville, S.C., for the last 70 to 80 years, is considering a move to another location and a format change. All of this activity points to the fact that showrooms and exhibitions are too costly for both the exhibitor and attendee in these days of reduced margins and low profitability. Change, therefore, is to be expected — not wanted, perhaps, but expected.

Business Down For Open-End Spinners
Open-end (OE) spinners say that prices are holding, but business is way down. You may remember that last month, weavers were quoted as saying that in the recent past, everything but volume was pretty discouraging. They went on to say that volume was now terrible. It looks like the “virus” has spread to spinners as well.

One spinner said, “Some spinners still think they can corner the market by offering low prices, but you know that is not going to happen.” Past experience tells us, in fact, that it only hastens our demise as manufacturers. He went on to say, “The hosiery trade has not come around as expected, either. I went to visit a plant we routinely call on and found the plant was closed for the week. I had not been informed.” The routine comment from spinners generally is that no one is buying.

“What sells today is price! Of course, the customer expects (and deserves) quality and service along with the price,” said one OE spinner. Was he actually saying that we have been dragged, kicking and screaming, into the pricing mentality of the big name “marketeers?”

A yarn man, who sells just yarns, made the observation that the ultimate consumer is just about gone. Mills that once could identify themselves in the marketplace can no longer do it. He noted an organization that recently divested itself of sales yarn. Other divisions within the company are now back “on the block.” Regarding his own company, he said, “Overall, our business is decent, but we deal in specialty yarns for relatively narrow end-uses. Margins are decent because we have no overhead. In other words, we couldn’t do it as a manufacturer.”

The Import Threat
Imported ring-spun (RS) yarns are being sold here at prices lower than those of domestically produced OE yarns. One question comes to mind — when all domestic mills of any size have been eliminated, will imported yarns and fabric prices remain low? What do you think?

Now, here is an interesting tidbit of information. It seems that a representative of one of the overseas manufacturers was recently in the United States purchasing machinery for shipment to China. Presumably this was used yarn equipment. Now, where do you think the yarn produced from the used domestic equipment will be sold?

You will notice that the prices of both spot and landed mill cotton have gone down again. The decrease amounts to more than 10 percent, but then, who needs cotton when you can’t sell your yarn?

If misery loves company, virtually everyone in yarn manufacturing is having a love fest. Synthetic spinners and texturizers are in the same boat with cotton spinners. A texturizer called his markets “horrendous.” He said, “We have some inventory adjustments to overcome, but it will probably be the third quarter before we see much relief.” If you will remember, a weaver predicted much the same thing last month.

Suddenly prices have ceased to be the major concern for yarn producers. The problem now is demand.

And that’s the way it is this month — the mighty Casey hasn’t struck out, but there is no joy in Mudville.

June 2001

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