India Cotton Yarn Demand Active Price Has Bottomed Out

Now the cotton yarn Market in India is beset with huge losses.

SanjayKJain, CEO of TT company in India, recently wrote an analysis of the current India cotton yarn market.

He believes that in the past few months, the price of cotton yarn in India has been fluctuating violently, and the factory has been in extremely difficult position.

In the 7-9 months of the textile off-season, the downstream procurement was very slow and prudent. The market worried that the price of new cotton would drop after a large listing, and the large quantities of cotton purchasing enterprises in the early stage faced huge risks.

Now, with the arrival of the peak season of textile industry, the downstream enterprises are in urgent need of replenishment, and the market demand will gradually enter the peak.

At present, downstream buyers have been waiting for the opportunity, not to the last minute, do not give up easily, avoid being stuck at the high price point.

He said that the cotton yarn Market in India was unusual in recent months. India cotton price rose by 50% after its first surge of 10%, and its total price rose by 35%. In the coming period, cotton prices in India may continue to decline, but it is estimated that by December cotton prices will still be 25% higher than this year's low.

Meanwhile,

Prices rose 10% after 25%, and the cumulative increase is 12%.

In recent two weeks, demand for cotton yarn in India has been active, prices have bottomed up, and have risen slightly in recent days.

Although it is very difficult to predict the price trend, the following situation is worth noting:

1, India is the largest supplier of cotton yarn in the world.

Because

The cotton yarn output in India has decreased by 12% compared with the price of cotton yarn.

If India's monthly yarn production is less than 40 million kilograms, can the market demand be met? Is India spinning excess capacity really so serious?

2, even if the price of cotton in India falls after November, if the price of cotton yarn is stable, there is still no profit for India's cotton mill. Therefore, it is unlikely that India will substantially increase cotton yarn output after November.

3. Cotton planting area in India has been reduced by 12% this year. If output per unit area is raised, cotton production is expected to be the same as last year, so output is still the lowest in nearly 5 years.

Due to low inventory at the beginning of this year, India

It will still be 20% higher than last year.

4, at present, the cotton yarn inventory in India's circulation channels may be the lowest in many years.

As we all know, low inventory is the biggest inducement of price rise.

All buyers want immediate delivery, because they are out of stock now.

5, under normal circumstances, the price of cotton yarn in November -2 showed an upward trend, as demand increased.

6, the start-up rate of textile factories in India and Pakistan has declined due to the low market demand and the loss of sales at current prices, which may lead to insufficient market supply.

Because the loss is too great, the factory raises the price or the pressure of reducing production is very large. Now, there is no intention to reduce the sale price.

According to the above basic analysis, India cotton yarn prices will not continue to fall, all bad factors have passed, and the only problem now is the psychology of the market.

The typical characteristic of bear market is that the market can only see the bearish signal.

However, when the market is suffering from bloodbath, it is the best time to buy. The reversal of cotton yarn market is imminent. Now it is time to make purchases.

The supply of cotton yarn in India is expected to decrease significantly in October, which is the cumulative effect of cotton yarn production in the past 3 months.