Although the upstream raw materials have been in stable consolidation recently, with some small fluctuations in some cases, the market market is still flat and unstable, and it is difficult to boost the mentality. The overall yarn market continues to be flat, with prices stabilizing and spinning mills maintaining a wait-and-see mentality. As of April 15, 2021, CY C32S pure cotton yarn closed at 24,110 yuan/ton, down 15 yuan/ton from the same period last month.
As of April 15 , the CC3128B cotton index closed at 15,353 yuan/ton, down 19 yuan/ton from the same period last week. The rumor that has been making a lot of noise recently is that “relevant departments are considering issuing an additional 2 million tons of cotton import quotas with sliding quasi-tariffs in 2021.” Judging from the rumors, the composition of the 2 million tons of sliding quasi-tariff cotton import quota is: 700,000 tons of processing trade + 700,000 tons of market-oriented imports + 600,000 tons of China Reserve. The rumor is “well-organized”, but first, China Reserve There is no cotton import quota at all for cotton entering foreign countries, and there is no need to pay tariffs, so why is there a 600,000-ton sliding customs import quota? Secondly, the total of processing trade + market circulation is 1.4 million tons, which is really huge. Especially if 700,000 tons of sliding quasi-tariff quotas are used for market circulation, wouldn’t it be a “flood” and harmful to people? Why are there rumors of issuing cotton quotas after the boycott of Xinjiang cotton by some European and American institutions and companies? One theory is that after relevant institutions and companies boycotted Xinjiang cotton, the use of foreign cotton by some export companies increased sharply, resulting in a gap in the supply of imported cotton. But will additional quotas really be issued? It is possible, but it will definitely not be as much as 2 million tons. It will most likely not exceed 1 million tons or even 800,000 tons. It is rumored that the quantity will be at least “halved”. After all, my country’s cotton yarn imports have continued to grow in the past two years, and its role as a substitute for imported cotton has become stronger and stronger. It also circumvents the U.S. government’s Xinjiang cotton product import ban and does not affect orders from European, American, Japanese and Korean textile and clothing brand companies. According to statistics, my country imported a total of 1.9003 million tons of cotton yarn from January to December 2020, a year-on-year decrease of only 2.69% due to the severe impact of the COVID-19 outbreak in the first half of the year; in addition, the direction of Sino-US and Sino-European relations is very unclear, and the probability of confrontation and cooperation with China It is still unknown whether my country’s textile and apparel companies can receive enough orders for mid-to-high-end products.
The downstream market has the following characteristics recently: First, most textile companies can support their orders until the end of April or even mid-May. , but the number of new orders in May and June is not ideal and lower than expected; secondly, although some domestic textile enterprises and weaving mills have experienced “production exceeds sales” since mid-March, the inventory accumulation rate has not been high so far. It is considered very high. China’s yarn inventory closed at 13.7 days on April 15, while gray fabric inventory closed at 22.3 days. Although the capital flow pressure has increased compared with around the Spring Festival, it can still operate effectively; thirdly, although Zheng Cotton CF2109 contract The market price once fell below 15,000 yuan/ton, but textile companies currently have no plans to buy at the bottom and stock up. The lower the cotton futures price, the more cautious cotton companies will be in purchasing, not to mention that cotton futures prices have rebounded slightly in recent days. Fourth, regarding the impact of the “Xinjiang Cotton Incident” on cotton textile and clothing companies, there is a big gap in the feedback results from each company. Generally speaking, large factories and export-oriented companies think it has an impact, mainly on medium and long-term orders, and companies are currently We must promptly adjust the origin of raw materials, order product grades and sales markets to minimize the negative consequences of international clothing brands’ “boycott of Xinjiang cotton”. However, most small yarn mills, cloth factories, and fabric companies have said that they have hardly been affected. There were no restrictions on orders or delivery.
The recent imported yarn market has been generally stable, with some slight declines. As of April 15, Yinyao C32S closed at US$3.27/kg, Yueshan C32S closed at US$3.13/kg, and Pakistan C20S closed at US$2.79/kg, all unchanged from last week. In terms of demand, market demand in March was lower than expected. Although there was support from early orders, the overall market operation rate remained at a high level. However, as prices fell and orders were gradually completed, the operation rate in some areas dropped slightly. Among them, the Lanxi area has a high startup rate, but the inventory of weaving mills has accumulated more. The average inventory by the end of the month has been around 36 days. The cotton inventory of weaving mills in Nantong, Weifang, Foshan and other places is also accumulating, but the comprehensive inventory level is lower than Lanxi. In terms of operating rate, it remains stable overall, with some slight decreases in Guangdong and Shandong.
Looking at the market outlook, although the latest USDA monthly report increased global cotton consumption and pointed out that it benefited from Chinese consumption However, domestic cotton supply remains loose, and Xinjiang cotton and imported cotton resources are still sufficient. In terms of orders, the domestic sales market is better than export sales. A small number of domestic orders have been placed, and the sustainability remains to be seen. The progress of foreign epidemic control is far lower than expected, and the follow-up of new orders is not timely. Entering March, inventories of textile companies increased, raw material procurement came to a standstill, and the market had a strong wait-and-see sentiment. As the Xinjiang cotton situation has developed so far, under the nationwide boycott and condemnation, most brands have chosen to keep quiet. BCI has also secretly removed the original statement banning Xinjiang cotton from the shelves. But the domestic textile industryExport companies are still under considerable pressure. The recent news of increasing cotton import quotas may also be to alleviate the cotton consumption difficulties of enterprises. If the quota increase comes true, it will have a greater impact on domestic cotton consumption. Improving the international awareness and brand influence of Xinjiang cotton will also become an empty talk. </p