Weak demand for cotton yarn continues in North India; prices unchanged

The demand for cotton yarn has been weak since the beginning of the new financial year, according to traders. Fabric manufacturers have been facing muted buying from the garment industry and a lower margin is discouraging them from producing more fabrics. The prices of grey and finished fabrics are not rising due to this weak demand from the garment industry.

A trader from Ludhiana told Fibre2Fashion that spinning mills did not reduce their quoted prices despite a weaker demand. Cotton yarn prices are facing a bearish tone but a higher spread between market rate and mills’ rate is not feasible. In Ludhiana, 30 count cotton combed yarn was sold at ₹400-420 per kg, while carded yarn of 30 count was quoted at ₹375-395 per kg, according to Fibre2Fashion’s market insight tool TexPro. 20 and 25 count combed yarn were traded at ₹385-405 and ₹390-410 per kg, respectively.

Delhi market also noted steady prices amid weaker demand. According to a trader, there is a cyclic trend in demand which involves buyers remaining silent for around one fortnight and coming back to the market in the next fortnight. In Delhi market, 30 count combed yarn was traded at ₹390-410, 40 count combed at ₹440-460, 30 count carded at ₹375-385 and 40 count at ₹415-425 per kg, according to TexPro.

Recycled yarn prices also remained steady in the Panipat market. Traders said that current weak demand was not supporting an upside trend. In Panipat market, 10s recycled yarn (white) was traded at ₹100-110 per kg, 10s recycled yarn (coloured - high quality) at ₹100-105 per kg, 10s recycled yarn (coloured - low quality) at ₹75-80 per kg and 20s recycled yarn (coloured) at ₹130-145 per kg. 10s optical yarn was traded at ₹125-130 per kg in the market.

In the global market, ZCE cotton yarn May 2022 futures traded down by CNY 375 to CNY 27,635 per ton and September 2022 sold higher by CNY 115 at CNY 27,675 per MT today. ZCE cotton May gained CNY 25 to reach CNY 20,900 per MT and September contract traded up by CNY 5 to CNY 21,150 per MT.

ICE cotton futures closed with mixed session on Friday. Cotton contract for May 22 closed at 132.41 cents, down 79 points, Jul 22 closed at 131.06 cents, down 34 points, and Dec 22 closed at 115.48 cents, up 79 points. "The WASDE report was mainly neutral with a slightly bearish tone. The world ending stocks went up. It is significant to note that we've had an almost continuous decrease in ending stocks and this rise perhaps signals the end to the reduction," said an analyst.

In North India, cotton prices remained stable for the second consecutive session on Monday amid limited demand from mills, while daily arrivals declined. In Haryana, cotton was quoted at ₹89,000 to ₹91,000 per candy. In Upper Rajasthan, cotton was priced at ₹91,600 to ₹92,000 per candy. In Lower Rajasthan, cotton prices remained at ₹86,400 to ₹88,300 per candy for spot delivery.

ALCHEMPro News Desk (KUL)