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Insight | Time: Nov 8 2019 1:30PM
Oct cotton yarn imports may rise 18.4% m-o-m to 166kt
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1. Imported cotton yarn arrivals to China assessment

Cotton yarn imports to China in Oct are estimated at 166kt, up 23.13% y-o-y and 18.4% m-o-m. As demand for imported cotton yarn was tolerable, the increase of imported cotton yarn in Oct is consistent with expectation amid “Golden Sept and Silver Oct”. Considering that some Pakistani cotton yarn is not calculated into the customs’ data, the cotton yarn imports shown by the customs may be 20kt less than actual imports, and the cotton yarn imports of China customs is predicted at 146kt.

According to the shipments in overseas market in Sept, the imports from Vietnam is estimated at 74kt, from India about 15.4kt due to large spread between forward and spot ones, from Pakistan about 28kt (the customs statistics may show at 3-5kt), from Uzbekistan 17kt, from Indonesia 12kt, from Taiwan 8.5kt and from other regions and countries 14kt.

2. Traders' reflection

Note: Over 30 enterprises are surveyed, covering over 50% of cotton yarn imports.

Major traders and L/C issuing companies reported more arrivals of imported cotton yarn in Oct.

3. Imported yarn stocks and supply and demand outlook in Nov
In Sept-Nov, arrivals of imported cotton yarn averaged at 150-160kt, mainly benefiting from the expectation to peak season and recovery of traders’ profits after Sept. In Sept-Oct, the market demand was tolerable and traders destocked well, with some varieties even short of supply. But since Nov, downstream demand weakened obviously and sales of traders turned more slowly. As the arrivals increased, stocks of traders moved up. Most of the stocks need to be cleared before Spring Festival, which may weigh on the price. In addition, RMB appreciated over 1000 points and the ordering cost declined 300-400yuan/mt. Adding the reserved profits room when ordering, traders saw improved profits. Amid poor demand, rising stocks, improved profits and coming Spring Festival, traders may be more willing to keep the profits at hand. If there is no impact from cotton price and macro factors, price of spot imported cotton yarn is likely to weaken later, but due to rising cost and better expectation, there is limited downward room.

[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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