Since May, the domestic cotton yarn trading volume and price have continued to rise, and cotton spinning companies in various places have reported that cotton yarn inquiries and shipments are good. So, what is the current yarn sales situation across the country? What is the reason for the market recovery?
The off-season is not weak, and medium and high-count cotton yarns are shipped quickly
According to reports from some cotton spinning companies in Shandong, Henan and other places, cotton yarn inquiries and shipments in May The situation continues to improve compared with April. The production and sales of C26s, C32s, and C40s are relatively active, and the supply of mid-to-high-end C40s is temporarily tight. Orders for high-count carded and combed yarns of 50S and above have also bottomed out, with few early orders, low inventories and high profits. Although the demand for OE yarn and low-count ring spinning yarn is recovering slowly, the problem of “poor circulation” in all links of the industrial chain such as cotton, cotton textiles, fabrics, clothing, and foreign trade companies is gradually being alleviated. Cotton companies, textile companies, and terminals Confidence was further restored.
A medium-sized cotton spinning company in Zhengzhou said that the cotton textile industry has shown a strong off-season phenomenon this year. The inventory of medium and high-count cotton yarn has smoothly dropped to a low position with demand. Since May, the ex-factory price of yarn has been raised very cautiously. C21s~ C40s rose by an average of 300 yuan/ton to 400 yuan/ton, which was lower than the increase of about 700 points in the Zheng Cotton CF2109 contract. A survey shows that recently, the enthusiasm of cotton yarn traders in the light textile markets of Guangdong, Jiangsu, Zhejiang, Shandong and other places for price inquiries and replenishment has rebounded significantly compared with April. The main focus is on conventional yarns, and the demand for combed yarns and special spinning yarns is not high. .
According to feedback from traders in the light textile market in Foshan, Guangdong, Shaoxing, Zhejiang, Jiangsu and other places, since the May Day holiday, downstream weaving factories, fabric factories, and intermediate links have continued to recover in terms of inquiry and delivery of imported cotton yarn. The quotations of Pakistan’s 8s~16s siro spinning and cotton yarns from Vietnam, India, Indonesia and other origins have all tentatively increased, and the acceptance and digestion capabilities of the industrial chain terminals have continued to increase compared with March and April.
A textile import and export company in Zhejiang said that in the past half month, not only the actual orders and shipments of medium and high-end air-end spinning yarns such as OE16s, OE21s, and OE26s have picked up, but also high-end yarns from 40s to 60s in India and Vietnam. Yarn transactions bottomed out and there were obvious signs of rebound. The resurgence of the COVID-19 epidemic in Southeast Asian countries such as India and Bangladesh has led to increasingly severe production shutdowns in spinning and clothing factories. Orders for bedding, home textiles and some mid-to-high-end European and American clothing have returned to China. In addition, the recent appreciation of the RMB against the US dollar has been relatively large. Due to the influence of some international clothing brands’ “exploitation of Xinjiang cotton”, imported cotton yarn has attracted the attention and favor of export-oriented enterprises and OEMs.
As for the reasons why the cotton yarn trading volume and price continued to rise after the “May Day” holiday, most textile companies summarized the following points: First, the main contract of Zheng Cotton rose from 15,530 yuan/ton to 16,250 yuan/ton; The cost of cotton yarn has subsequently risen; secondly, the closure of cities in India, Pakistan and other Southeast Asian countries and unstable freight channels have not only led to the return of short-term orders, but also the gradual overflow of long-term orders from Europe, the United States, Japan and other countries. Domestic textile and clothing companies have become less worried and less enthusiastic about accepting orders. rise; third, due to the raging epidemic in India, the industry expects that there may be major problems in the shipment and delivery of Indian yarn, Pakistani yarn, Indonesian yarn, etc. in the April to June shipping schedule, and the supply capacity of imported yarn has declined rapidly; fourth, cotton yarn trade in coastal areas The timely replenishment of warehouses by merchants and the replenishment of orders in the domestic market in autumn and winter also supported the rebound in cotton yarn prices, and shipments became smoother.
Waiting and watching the market outlook, yarn companies are steadily receiving orders
The reporter learned that there is no shortage of orders from spinning companies in various places, but most of them have a wait-and-see attitude towards the market outlook.
Vortex spinning yarn sales in Jiangsu are weak, downstream demand is insufficient, and foreign trade orders are hampered by foreign epidemics and shipping issues. With downstream demand continuing to be insufficient and foreign epidemics recurring, companies have stated that weak sales are not expected to change significantly in the short term. On the contrary, the local high-count yarn market has good sales conditions, the good market atmosphere continues, and orders remain stable for the time being.
In terms of colored spinning, a certain colored spinning company in Jiangsu stated that due to the impact of orders received in the early stages of production, the price of early orders has not changed. The new singles are currently scheduled until early July. Due to the drop in raw material prices in April, the price of new monochrome spinning yarn has dropped slightly, and the market is expected to remain light in the near future.
Shandong cotton textile cluster enterprises, which mainly deal in pure cotton low-count yarn, reported that the company is currently running normally and is basically producing at full capacity. Yarn prices have dropped slightly, product profit margins have been further compressed, and there is basically no inventory. At present, the efficiency of downstream home textile and apparel enterprises is still good. It is expected that the start-up status of enterprises will remain basically unchanged in the future, orders may further decrease, and product inventories will increase.
A company in Shandong that specializes in differentiated yarn said that the price of regenerated cellulose fiber raw materials has dropped, traders have severely sold goods, and the current market price is relatively chaotic. Coupled with insufficient market demand, the company’s operating pressure is great. However, all units can still be opened at present, and forward orders can be scheduled until August. Affected by the epidemic, orders from international brands have recently decreased, and uncertainties will increase in the future. Business operations will face challenges in the future.
A textile company in Peixian County, Jiangsu, which mainly sells viscose yarn, said that the viscose yarn market purchase and sales are weak, the volume and price are weak, the downstream demand is sluggish, and order negotiations are the main focus, leaving room for negotiation. As the market expects price cuts for viscose raw materials, downstream procurement is cautious. The current yarn inventory of enterprises is close to one month’s supply. The overall purchase and sales of the downstream gray fabric market are relatively weak, and the inventory of finished products in weaving factories has accumulated.
Henan pure cotton yarn manufacturers generally stated that the recent increase in raw material prices, stable raw material procurement, sufficient inventory, daily order-based production, basically smooth production and sales, and an opening rate of more than 80%. Pure cotton products�With a relatively fixed sales market, it is relatively difficult to develop new customers. It is expected that market prices will remain stable in the future.
A non-cotton yarn spinning company in Fujian stated that production and operations are currently in order. The price of non-cotton raw materials has dropped in the past two weeks, market vitality has weakened, and procurement has slowed down. The company is mainly waiting and watching for the later market. .
Multiple factors have increased the pressure on small and medium-sized yarn mills
Currently, judging from the feedback from small and medium-sized yarn mills and weaving enterprises, they are still facing many challenges. The operating pressure can be summarized as follows:
First, since January 2021, banks’ credit support for small and medium-sized cotton textile enterprises has declined significantly compared with the first half of 2020, and it is difficult to obtain loans. Gradually rising, some textile companies said that capital flow pressure continued to rise.
Second, as some autumn and winter domestic sales orders are issued, although cotton yarn and gray fabrics have accumulated inventory, it is not outstanding. There are very few companies that have reduced or suspended production in the near future, but consumer terminals such as fabrics, clothing and foreign trade companies Customers’ cash flow is generally tight, and it is increasingly difficult to collect gauze payments in a timely manner. Some customers even propose various payment methods such as credit, 1 to 3-month account terms, letters of credit, etc.
Third, the prices and costs of foreign trade orders or processing orders distributed by large companies are relatively serious. Enterprises said that although the general contract quantity is large, the processing period is long, and the proportional payment of the payment is relatively timely, Considering that profits are not high, the appreciation of the RMB and the price of raw materials such as cotton and polyester staple fiber may still fluctuate significantly in the second and third quarters of 2021, they are unwilling or afraid to take long-term orders.
Fourthly, compared with large-scale cotton textile enterprises, it is difficult for small and medium-sized enterprises to recruit, retain, and train talents. Therefore, the problem of “labor shortage” is more common. A yarn factory in Handan, Hebei said that the current job vacancy rate is 10% to 15%. On the one hand, due to the limitations of the working environment, office conditions, and factory location, young and educated people are unwilling to enter the factory; on the other hand, the company’s salary, Salaries and other benefits are also lower than those of large factories or companies in southeastern coastal areas. </p