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Cotton prices continue to weaken, textile enterprises to suspend production willingness to increase, the opportunity to sell imported yarn?

Jul. 13, 2022

  Since the middle of June, by the Federal Reserve aggressive interest rate hike, as well as the domestic fundamentals of the weak pattern continues to affect, Zheng Cotton cost end support stage collapse. After falling sharply, zheng Cotton short - term technical rebound. But in the medium and long term, the supply increase is expected to gradually materialize, the situation of poor demand has not improved, and the subsequent cotton price is still weak.

  Although the cotton price plunged in the middle and late June, the immediate profits of textile enterprises were obviously restored, and the enthusiasm of point price procurement was improved. However, in the case of lack of terminal orders and continued accumulation of finished goods inventory, textile enterprises lacked the power to replenish the stock of raw materials, and they were still mainly engaged in the procurement of fresh demand.

  According to statistics, as of July 1, cotton inventory of textile enterprises was 20.6 days, 0.9 days less than last week; Cotton yarn inventory of textile enterprises was 42.8 days, 2.7 days more than last week; Cotton yarn inventory of textile mills was 4.6 days, 0.4 days less than last week; Stocks of all-cotton fabric were 42.5 days, up 1.2 days from last week. Textile enterprises go goods are not good, the off-season atmosphere is still strong, operating rate continues to maintain a historical low level of the same period.

  Overall, the area trading has been reflected on the disk, the impact of the following weather trend on the yield per unit will be the main factor in the short-term disturbance of cotton prices, among which the drought in the United States or the biggest variable. In the global cotton supply and demand from tight balance to gradually loose trend, long-term cotton price weak pattern is difficult to change.

  Cotton yarn volume price double drop textile enterprises stop production willingness to increase

  According to the feedback of several small and medium-sized cotton textile enterprises in Shandong, Henan and other places, into the late June, not only OE yarn and 8S-16S ring spinning goods gradually slowed down, and the factory price and light textile market transaction price is more than shade drop, the 50S and above high branch general comb/combed yarn orders are still rare, yarn factories can only process according to the single.

  From the survey, some small and medium-sized weaving mill recent coastal regions such as guangdong, jiangsu and zhejiang, fabrics enterprises continue to compression capacity, and even suspend production will still on the rise, in addition to the lack of orders, the peak price rises, terminal collection slowly tightening, cash flow and fg inventory partial higher are induced enterprises purchasing capacity "reduction" of the important factors.

  Some cotton textile enterprises said that due to the large cost difference of cotton, polyester staple fiber and other raw materials of various enterprises, as well as the large difference of gauze storage of various enterprises and different operating pressures, the price difference of cotton yarn in the market is chaotic, and the price difference of medium and high cotton yarn of different manufacturers and brands C32 and C40 even reaches 800-1000 yuan/ton. Hebei Baoding a yarn factory reflects, if knitting yarn, towel yarn orders in July still can not meet the factory more than 60% of the capacity, can only be forced to choose to suspend production holiday.

  Imported yarn "borrow wind", cloth factory signing enthusiasm rises

  According to places such as guangdong, jiangsu and zhejiang feedback part of the textile import and export corporation, coastal area since late June, cotton weaving enterprise middleman on imported cotton inquiry, enthusiasm to cargo sustained rebound, Vietnam yarn, yarn, yarn, Indonesia, India and central Asia uzbekistan yarn as well as the United States, the European Union for cotton products import ban boundaries and clinch a deal is quiet, The phenomenon of selling goods at low prices exists in trade.

   A medium-sized textile factory in Xiangshan, Zhejiang province said that because the FOB/CIF quotation of 20-32S cotton yarn in India has been greatly reduced recently, and the company's knitted textile and clothing export market is mainly the United States and the European Union (a small number of Christmas orders are expected to be issued in advance), Therefore, we started to give the actual orders to the perennial cooperation mills (brands and large factories) in India and Vietnam 1-2 months in advance. 

  Why does weaving factory, fabric enterprise sign a contract to purchase the enthusiasm of import yarn rebound? There are three main reasons as follows: First, since the middle of June, the inverted range between the quotation of RMB for imported cotton yarn and that of domestic cotton yarn continues to narrow, and the competitiveness of imported yarn continues to rebound. Second, since June 21, the United States on a comprehensive upgrade XinJiangMian ban, and other southeast Asia, asean countries are involved (disable XinJiangMian exports to the us), plus the European Union following the United States banned xinjiang cotton products into the market, therefore has the export orders or plans to export Europe and the United States single weaving on imported cotton, cotton yarn, fabrics enterprises is a kind of rigid demand. Third, compared with imported cotton spinning, directly imported cotton yarn can save time and reduce costs.

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