China cotton prices stabilized by looming US embargoes

Cotton prices slightly rose in China amid tight supply and lower demand. Import prices were sharply higher, leaving room for a new increase in domestic prices. With US embargoes looming, however, processors continue keeping stocks at extremely low levels.

Already confronted with excess production, China''s spinners are waiting for more information about the coming level in apparel exports.

As US embargoes are looming on China''s exports in a few major apparel categories, cotton buying was suspended in a large number of processing plants to keep costs as low as possible.

Tight supply within China helped prices in further rising in the past week, however.

Higher import prices

Average price for 328 grade was up 15 yuan per ton or 0.08 cent per pound in the week to Monday (+0.11%).

Prices of 329 grade are now reaching 13,200 to 13,500 yuan depending on markets while 429 grade prices are between 12,700 and 13,100 yuan.

Average price of 527 is fluctuating between 11,800 and 12,200 yuan per ton.

If demand is currently depressed by an absence of negotiations between the US and China, cotton shortage could lead to a rebound in prices in coming weeks, however.

A sharp rise in China''s orders has already led to a rally in international prices with import prices strongly rising at Chinese ports.

Average price for US EMOT M 1.3/32 reached 58.95 cents per pound on July 4 from 56.75 a week earlier.

Prices could further rise in the coming season with an expected fall in production and a continued increase in consumption in line with higher yarn capacities.

Emerging Textiles.com