Home    Resource Store    Past Issues    Buyers' Guide    Career Center    Subscriptions    Advertising    E-Newsletter    Contact

More Yarn Market

A Transformation Story
November 23, 2015

Strong Close To 2015 Expected
October 13, 2015

Production Continues To Expand
September 22, 2015

Ring-Spun Continues To Be In Short Supply
August 18, 2015

Orders Strong; Capacity Expanding
July 19, 2015

Textile World Photo Galleries
November/December 2015 November/December 2015

View Issue  |

Subscribe Now  |


Vietnam Fashion, Fabric & Garment Machinery Expo
11/25/2015 - 11/27/2015

From Farm To Fabric: The Many Faces Of Cotton - The 74th Plenary Meeting of the International Cotton Advisory Committee (ICAC)
12/06/2015 - 12/11/2015

Capstone Course On Nonwoven Product Development
12/07/2015 - 12/11/2015

- more events -

- submit your event -

Printer Friendly
Full Site
Yarn Market
Jim Phillips, Contributing Editor

Concern Over Pricing

By Jim Phillips, Contributing Editor

R aw material costs are on the minds of US spinners, as many anticipate sharp price hikes, particularly in cotton, before the end of the year.

Much of the fear is driven by the possibility that Chinese imports of US cotton, which have decreased since the beginning of the year, may significantly increase over the last half of 2007. At the same time, US cotton acreage continues to decrease. Yarn spinners, especially those focusing on cotton, are becoming increasingly uneasy about what cotton prices are going to do as a result.

“The disturbing thing,“ said one spinner, “is that we’ve seen cotton prices move up 5 to 7 cents while we’ve seen our prices soften by 5 cents, which is really in the wrong direction. I think part of this is because there has been a lot of liquidation, particularly on the ring-spinning side, in the last 120 days. One of the things driving this, I believe, is that a lot of people think we’re going to see [a good bit] higher cotton in the second half of the year. They are reluctant to go sell forward contracts cheaply. I think, because of this, when we get started back up after the Fourth of July, we’ll see slightly higher prices for our products. Whether it will be enough to cover the increase in the price of cotton is the $64 question. Open-end, on the other hand, in which demand is extremely strong, is seeing higher prices, but only by a few cents.”

One spinning executive had this to say about cotton prices: “It’s a big concern at the moment. The cotton market is a different market than it was 20 years ago — or even five years ago. When you’ve got one country that controls 45 percent of the cotton consumption in the world, it’s hard to determine what cotton prices are going to do. All indications for the past few years [are] that prices should be a lot higher than where they have been. But it hasn’t happened. Now that we see an increase in price, does it mean prices are going to go up at retail? Will consumers have to pay more? Will this cause a decrease in demand? Yarn spinners are caught in a situation today where margins are so thin that you have to pass price increases through. Otherwise, you’re better off not even running.”

The Rumor Mill
Is In Full Production

In an industry with such competitive pressures as those faced by US textiles, separating rumor from fact is often a daunting task. One current rumor is that major apparel brands are struggling with issues from their Asian suppliers and are looking to move substantial amounts of production back to the Americas.

“I've heard from what I consider to be a reliable source that one of the big names is getting ready to move all production back to the Western Hemisphere,” said one spinning executive. “I know several companies that are trying to position themselves to take advantage of this. I have heard [some] apparel companies have become fed up with the quality of service they are getting,” he added. Apparently, there have been numerous delivery issues, as well as quality concerns about products sourced from Asia. Particularly troublesome is that there have been many inconsistencies in the accuracy of shipped textile products. “I know of at least one apparel company that was stuck with a huge inventory of the wrong product,” he said.

“The anecdotal story you hear is that a number of people have been burned by Asia, whether in quality or lead time or buying the wrong stuff and being stuck with it six months later,” said another spinner. “The brands all seem to say they are always going to have X percent — for some it may be 20 percent, for others, 25 or 30 percent — of the textile products they buy come from North America. They say they are going to maintain a supply base here. I’ve been hearing that story more and more, but I can’t absolutely say I’ve seen evidence of that.”

Countered an executive of a major US spinner: “I’ve heard this rumor, but, in a lot of ways, it’s just more of the same thing. One brand may be looking at putting production back in the Americas. But at the same time, two or three more are leaving.”

Rumor aside, one thing is certain: Whether it is speculation about raw materials consumption and prices, textile and apparel import volumes, or even forging strategic partnerships to leverage supply chain efficiencies and lower costs, Asia is never far from the minds of US spinning executives.
July/August 2007

Related Files:
Download Current Yarn Prices.