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Yarn Market
J. Karl Rudy, Technical Editor

Surprises In The Marketplace

J. Karl Rudy, Technical Editor

G reige goods weaving, as one spinner put it, “is in the tank,” and spinners are feeling the effects. The sad thing about it is weavers are not at all optimistic about an early recovery. As one said, “ Business is absolutely horrible. We have been under margin pressure for several years, but the volume was okay. Nowadays, there is no volume either. We hope and expect improvement, but not before the third quarter — probably the fourth.” Of course, that means curtailment — not only in the weaving segment of the industry, but also to all suppliers of that segment. After the disaster in the 1970s, no one wants to build inventory, so that means curtailment — big time!

In spite of all the negatives and pessimism, there are always little surprises that give a person some hope. Commenting on how soft his markets are, one spinner said, “Surprisingly enough, we have seen a big increase in demand for poly/cotton yarns. We need business to offset the losses in the home furnishings market. The home furnishings market is so huge that a slowdown in this area really affects us severely.”

Denim Still Kicking?
Another market area in the surprise category is denim. It was not too many months ago that people were predicting sad things for denim markets. Fashion trends were changing. Denims were out. Gabardine twills were going to replace the time-honored fabric of the cowboy. Now, a spinner says, “ Denim markets continue to be good, especially with novelty yarns like slubs, nubs, and the like.”

Only one spinner said he was running full and his markets were satisfactory. He even noted a slight pick-up in home furnishings, contrary to reports from other spinners. He had this to say about market recovery, however: “This market is not going to recover rapidly, but neither do I expect it to deteriorate further — at least not in our markets. But you have to remember that we are not in the mainstream.” In other words, he is in a niche market.

Now, he is not the only spinner who has plants running full six days. One diversified spinner said, “The plants running colored yarns, slubs, and nubs are running six days. Others are curtailing some, especially those running coarse-count yarns for weaving.” Large amounts of coarse yarns are being imported at twenty or more cents below our best prices, according to another spinner.

CBI - No; CBI - Yes
Cotton spinners tell the Yarn Market that their markets should be at full strength at this time of year. The reasons they are not are many! Large inventories at retail; inventories at some manufacturers; and the constant increase of imports of yarn, fabrics and garments. Some spinners feel the CBI program is being manipulated — that is, not all fabric returned to the United States contains domestic yarn, nor is the fabric being produced there. They feel that both yarn and fabrics are being imported and relabeled for return to the United States. However, a synthetic yarn spinner said, “I feel the CBI is working as it should. We have seen an improvement in synthetic yarns for CBI. But when we put NAFTA in, we worried about the wrong border. The cheapest prices for textile products are coming from Canada.” This same spinner also said, “A fellow told me the other day that I should cheer up. Things could get worse. So I cheered up, and sure enough, things got worse!”

To add insult to injury, acrylic fiber prices have recently gone up, causing synthetic spinners to revise their approach to pricing. Don’t expect a man-made fiber spinner to come off his quoted price for acrylic yarn any more. What you hear is what you pay. There are also some rumors about polyester fibers increasing in price. Cotton prices are still coming down, but, as one spinner said, “No one has any 55-cent cotton. We all made our commitments for the year while prices were still over 60 cents.

The recent increase in open-end yarn prices is holding and will probably continue to hold until someone builds an inventory and offers it at bargain-basement prices. Then the downward spiral begins — again.

Sell Times Three
One respondent said he had to sell every order three times — once to the customer, then to management, and then to the financial institution. Of course, after it was sold, the plant didn’t like the price, banks didn’t like the terms, and management didn’t like the fact that it was a different product. Some days you just can’t please anybody.

May 2001

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