Spinners Move Buying Ideas Higher, But Remain Below the Market
Source: Globecot Date: 2007-09-19
Physical trade has been very slow across the various markets over the past week, as global cotton prices continue to climb back toward the July highs. One significant event appears to be that spinners, while not chasing the market higher, have proven willing to adjust inquiry levels higher. In Europe, where spinners' margins have continued under pressure, buyers in Italy, for example, were seeking SM 1-3/32" lots at 60.00 to 65.00 cents; and by Friday, September 14, were bidding 67.00 to 68.00 U.S. cents. Bids by Friday were still 2 to 3 cents below offers, but they still reflected a major increase in buying levels.
In Turkey, a small volume of offtake in U.S. styles was noted early Friday, even after recent price strength, while West African styles moved off to Vietnam. Thus, spinners' buying ideas are now slowly beginning to be readjusted higher. The problem for spinners is that for three consecutive years when they followed price strength, it proved to be the wrong move. Second, local yarn prices have not yet reflected any significant price strength.
