China Buzz

Lint markets were stable to slightly higher with noted price strength in Zhejiang, Hubei, Hunan and Shanxi provinces. Currently inland averages for T328 and T229 are 11,488 and 11,867 yuan/ton. In Xinjiang, the same grades are priced at 11,830 and 12,159 yuan/ton. Import prices enjoyed gains today as well, with US styles advancing .75 to 1.25 cents/pound while Indian quotes were up .75 cents/pound. Derivative markets continue to be a non-factor though prices did rise at both the CNCE and ZCE today. The biggest factor for the lint markets today was the apparent break through between US cotton shippers and the AQSIQ.

The feeling from the textile mills is that they are firmly committed to buying hand to mouth and preserving cash flow, if not the 1 percent quota. Additionally, mills received a jolt of bad news with customs acknowledgement that February’s textile and apparel export numbers plunged 35 percent and 36 percent, respectively. Collectively, however, there was a massive drop of 56 percent in the total export value year on year. In February, Chinese textile mills exported 6.7 billion US dollars worth of textiles and apparel. For the current Chinese marketing year, September to February’s cumulative textile and apparel figures now total 88 billion US dollars, up ever so slightly, about .42 percent, versus the same time period a year ago.

Other relevant numbers published had total cotton imports in February at 93,000 tons, a rise of 15,000 tons from January but still a dismal 41 percent lower versus a year ago. Through February, cumulative cotton imports for the marketing year total 641,000 tons, down 471,000 tons or 42.4% year on year. Yarn production for February was up 263,00 tons from year ago, totaling 1.504 million tons for the month. For the calendar year 2009, total yarn production has reached 2.868 million tons, up almost 6 percent year on year.

The reserve purchasing program has begun to wind down and decreasing volumes have been noted all week. Today’s reserve procurement totaled 24,600 tons, including 10,000 tons of Xinjiang cotton and 14,600 tons of inland cotton. As of March 10th, cumulative 2008/09 reserve procurement has reached 2,475,550 tons, with 1,331,600 tons from Xinjiang and 1,133,950 tons from inland.

The yuan is slightly lower against the greenback this morning at 6.8404.