6 January 2015
Yarn margins have been further restored in December in China, thanks to a fall of cotton fiber prices, whereas the yarn/fiber spread slightly rose in India and declined in Pakistan. Our monthly report compares cotton fiber prices and cotton yarn prices in China, India and Pakistan, offering a comprehensive view of the yarn/fiber spreads in the three countries. These gross margins of domestic spinners are displayed on a monthly basis with historical data back to 2007 being available for download.
Cotton fiber prices have further plunged in the last month of 2014 in China and Pakistan, on average.
Cotton yarn prices have not decreased in line with such a decline, leaving larger margins with the spinners.
In China especially, cotton prices continued dropping from their excessively high levels of the beginning of last year.
In December, the benchmark indicator for cotton prices in China has lost nearly 1,000 yuan per metric ton or 6.9 cents per lb, on average.
Prices have declined 6.4% over the month, being down 30% in the full year 2013.
Meanwhile, cotton yarn prices only lost 2.8% in December if considering our benchmark 32s carded knitting in Qianqing.
Yarn prices were down 14.5% over the year, meaning that the yarn/fiber spread (or gross margin) has been boosted by 37% from its excessively low level in 2012.
At the same time, the yarn/fiber spread has not changed in India and Pakistan where the fall of cotton prices has been followed by a similar drop of cotton yarn prices.
As a result, gross margins of spinners are now slightly higher in China than in India, after remaining much lower for the past two years.
In Pakistan, the yarn industry keeps larger margins than elsewhere due to power shortages which are limiting the yarn production level, especially in winter, hence offering some strong support to yarn prices.
More data are available on a daily basis about the Yarn Market Prices: