In the past week, uncertainties in the geopolitical and macro environment have weakened the purchasing interest of various countries. The actual transactions are basically buy-as-you-go, and rising energy prices have not helped.

At present, spot demand is basically for immediate shipment, and cotton merchants can arrange shipments or are very confident that they can do so. And, while logistical bottlenecks have led to declining raw material inventories at destinations, it appears to have had a counter-productive effect on gauze inventories, especially in the Chinese market. It is reported that the gauze inventory of Chinese textile mills has been at least one and a half months, which is much higher than the normal level, and the current yarn prices in China and India and Pakistan have also begun to weaken.

On the one hand, the backlog of inventory is a problem of shipping, but it is also a fact that downstream garment factories and retailers have slow purchase orders. Of course, under the uncertain macroeconomic environment, it is not surprising that this situation occurs, after all, it will affect the cotton import demand of Chinese weaving mills and the demand for domestic yarn.

The situation in Vietnam is not much better, although other textile manufacturing centers such as Indonesia and South Asian countries are slightly better, but the current overall situation of Asian textiles is not strong compared to 2020/21. ICE cotton futures have been standing above 110 cents per pound for a long time, and the actual quotations of various varieties of cotton are around 125 cents per pound. It is obvious that textile mills need to realize and sell their products as soon as possible, rather than guarding the high price. product inventory.

In general, before the massive replenishment of such high-priced raw material inventories, global textile mills are increasingly willing to destock, and gauze prices will continue to be under pressure.