Spinning Capacity Estimate in Major Textile Markets

Vietnam, India and Pakistan remain major suppliers for imported cotton yarn in China year to date, and other markets like Indonesia, Uzbekistan and Malaysia also occupy certain share. It is of great importance to grasp the spinning capacity in these nations to operate more smoothly.

1. Vietnam was the biggest supplier for imported cotton yarn in China year to date, with spinning capacity at around 7.20 million spindles, and capacity of Chinese companies that invested there including Texhong, Bros Eastern, Huafu and Luthai possessed around 2.30 million spindles. Exports of Vietnamese cotton yarn from Chinese companies investing there shared more than 50% of its total export to China. Production cost of cotton yarn in Vietnam is more competitive than that in China.

2. Spinning capacity totaled around 52 million spindles in India by now, and exports of Indian cotton yarn to China plunged this year when cotton yarn price lacked advantage with high cotton price. Impacted by new GST and growing demand resulting from rapid development of economy, Indian cotton yarn price is supposed to be supported by local demand, and export price may lack competitiveness.

3. Spinning capacity amounted to around 12 million spindles in Pakistan, but exports of Pakistani cotton yarn to China kept decreasing year by year. Cotton quality is low in Pakistan, available for spinning low-count siro-spun cotton yarn, but partial demand for low-count siro-spun cotton yarn has been replaced by open-end ones. Besides, Pakistan does not have bullish export incentives, but Sino-Pakistan foreign trade is expected to be boosted by the Belt and Road. If Chinese buyers’ demand for low-count siro-spun cotton yarn improves, Pakistani cotton yarn may regain competitiveness by that time.

4. Spinning capacity totaled around 10 million spindles in Indonesia and exports of Indonesian cotton yarn to China stabilized at around 100kt per year in recent years. Cotton that used to produce cotton yarn in Indonesia has high quality, and price of Indonesian cotton yarn is slanting high, mainly contamination free. Chinese buyers became more sensitive to price with recently decreasing yarn price. It was learned that more than 20 spinning mills have been shut down in Indonesia this year.

Cotton supply in Pakistan and India is more stable than that in Vietnam and Indonesia as Pakistan and India are major cotton growers. Actually, imports of cotton yarn from Pakistan, India, Vietnam and Indonesia possess big share in China, having limited further upward potential.

5. Some Chinese textile mills like LT Textile International and Zhongtai New Silk Road have invested in Uzbekistan and Tajikistan. LT Textile International’s first phase project covering 0.12 million spindles has started operation in Uzbekistan, and is scheduled to reach 0.48 million spindles in the future. Zhongtai’s industrial park in Tajikistan will have 0.11 million spindles of capacity after established and cover cotton upstream and downstream sectors. Currently, Uzbekistan has around 137 spinning mills with capacity around 2 million spindles, and spinners are mainly small-sized ones with 5,000-20,000 spindles, having big developing potential.

6. Some Chinese companies also come to Malaysia for investment, but the investment scale is small, only for self-consumption, not for external sales. Shandong D&Y is a big Chinese company that has invested in Malaysia, with spinning capacity to reach 0.25 million spindles by the end of 2017 and to be 0.5 million spindles in the future, which will be the biggest spinning mill in Malaysia. Imports of Malaysian cotton yarn to China also deserve anticipating.

7. In China, spinning capacity was expected to be around 113 million spindles by the end of 2016. Capacity growth in China in recent years is mainly contributed by Xinjiang. Based on related report, current spinning capacity in Xinjiang is around 13.60 million spindles, which is to rise to 20 million spindles by 2020. Textile capacity expansion in Xinjiang is faster than earlier plan. Spinning capacity in Xinjiang is expected to be 17-18 million spindles by end-2017.