As of March 3, 2021, the price of cotton futures is 16,385 yuan per ton. From the low point in the first half of last year, it has risen by about 60%.
What impact will such a huge increase in a short period of time have on the textile industry? Will the prices of cotton products such as socks and towels purchased by consumers be affected by this?
The prices of cotton and other raw materials have soared, and the costs of textile companies have increased by nearly 30%
In Shaoxing, Zhejiang In a yarn factory, the reporter saw tons of lint cotton being dyed in a machine. After dyeing, this batch of cotton will be processed into yarn and sold to downstream fabric and garment factories.
Factory director Ji Guomiao told reporters that the biggest problem facing enterprises at present is that the price of raw material cotton has been rising.
Ji Guomiao told reporters that since yarn companies receive orders first and then produce, it is difficult to modify the shipping price after the contract is signed, and if raw materials continue to rise during this period, it will lead to significant costs. Improve and compress the profit margin of enterprises. In addition, the excessively high yarn price also makes it difficult for downstream fabric factories to accept it.
Ji Guomiao, Chairman of Zhejiang Shaoxing Jimaliangsi New Materials Co., Ltd.: Raw material prices have increased by 20%, and our prices have increased by more than 15%.
As cotton prices have been rising, so have yarn prices. As of March 3, the main price of cotton yarn on the Zhengzhou Commercial Exchange was 24,235 yuan per ton, an increase of more than 30% from the low in April 2020.
The reporter learned that currently yarn companies have begun to increase their cotton stockpiles. However, due to the high requirements for cotton warehousing, the company’s inventory increase is limited.
In addition, the prices of textile raw materials such as spandex have also increased significantly, which has also led to further increases in the costs of downstream fabric mills of yarns.
Industry insiders told reporters that although the current increase in yarn prices has caused downstream fabric and garment factories to have a wait-and-see mood. However, due to the saturation of downstream orders, the price increase of upstream raw materials will eventually be transmitted to the downstream, and the prices of fabrics and clothing will also rise together.
The number of orders has soared, and yarn companies have made considerable profits
What is the reason for the rise in cotton prices? Is the rise in cotton caused by increased downstream demand? Woolen cloth?
Since the second half of 2020, the price of cotton has begun to rise rapidly. For yarn companies, although profits have decreased as cotton prices have risen, continued growth in orders has made corporate profits still good.
The reporter learned that the current production orders of textile companies are generally scheduled until April and May. A large number of companies operate 24 hours a day, with people resting and machines not resting. Although profit margins have declined, overall profits are still good.
Industry insiders told reporters that the increase in domestic cotton prices is due to the increase in demand. Due to saturated orders, domestic textile companies are actively purchasing raw materials. At the end of January, the cotton industry inventory of national textile companies was 930,500 tons, an increase of 128,200 tons from the end of last month and an increase of 204,000 tons from the same period last year. On the other hand, yarn sales are accelerating. As of February 25, the number of days of inventory discount of finished yarn products in textile enterprises was 10.6 days, a year-on-year decrease of 56.7%.
The price of cotton products such as clothing towels may rise by 10%
Due to such a large increase in the price of raw materials in the cotton textile industry chain, the price of cotton products Will there also be a significant increase? Will the prices of daily purchased textiles such as towels and socks increase significantly?
During the interview, the reporter learned that due to the impact of the epidemic this year, not only orders for yarn fabrics and other products have been transferred from Southeast Asia to China, but even the clothing and cotton products industry has seen a return of orders. Phenomenon.
In December 2020, China’s textile and clothing exports were US$26.2 billion, an increase of 7.2%, of which textile exports were US$12.29 billion, an increase of 12.7%, and clothing exports were US$13.91 billion. U.S. dollar, up 2.7%. From January to December 2020, China’s textile and apparel exports totaled US$291.22 billion, a year-on-year increase of 9.58%.
However, the reporter learned that compared with the explosive growth of export orders, domestic consumer orders have only returned to pre-epidemic levels, and domestic demand for cotton textiles has not increased significantly. magnitude growth.
Shi Lei, Chairman of Zhejiang Zhuji Jieliya Textile Group: The annual output of towels is about 30,000 tons, and the monthly output is 2,500 tons. Current production comparison Saturation, starting in May 2020, has basically reached the production volume of previous years. Excluding rest periods, production capacity reached normal levels in January.
The reporter learned that although domestic The price of cotton products will increase as the cost increases. However, since the proportion of raw materials such as cotton in the cost will decrease in every link of the upstream and downstream textile industry, from raw material cotton to yarn to fabrics and finished products, ultimately The price increase for finished products will not be as large as the price increase for raw materials.
Shi Lei, chairman of Zhejiang Zhuji Jialiya Textile Group: The price of raw materials may have increased by 60%, but when it comes to finished towels, the increase is About 10%. An ordinary towel weighs 100 grams, and the ex-factory price is generally 13 yuan. If it increases by 10%, it will be more than 1 yuan.
Industry insiders told reporters that at present, the gross price of domestic clothing companies that sell wholesale goods is Interest rates are generally low, so the price of raw materials rises too fast in a short period of time, which will increase the price of clothing. The greater impact will be on clothing priced around 80 yuan. At present, the gross profit margin of many brands of clothing generally exceeds 50%, so the raw material price will increase. The price increase will have little impact on the cost of this type of brand clothing, and the selling prices of many brands of clothing will not change significantly.
Attachment: New market trends
Textile commodity price increase and decrease list on March 4, 2021
According to SunSirs Price Monitoring, in the commodity price increase and decrease list on March 4, 2021, a total of 2 commodities in the textile sector increased month-on-month. The top two commodities with the largest increase were spandex (1.46%) and PTA (1.19%). There were three commodities that declined month-on-month. The top three commodities with the largest decrease were polyester staple fiber (-0.83%) and polyester yarn (-0.68 %), lint (-0.41%). The average daily increase or decrease was 0.04%.
PTA Futures Daily Price List–Zhengzhou Commodity Exchange (3.4)
Explanation: (1) Price: Yuan/ton
(2) Trading volume and open volume: Lot
(3) Transaction volume: 10,000 yuan
(4) Up or down one: today’s closing – yesterday’s settlement
(5) Up or down two: today Settlement – yesterday’s settlement
(6) Delivery settlement price: 4,544
Provincial cotton price index
According to China Cotton Network, as of now, seed cotton processing in Hubei has basically ended. According to relevant sources, the processing of seed cotton at large local ginners ended in December last year. Currently, only 20% of small ginners are still processing, and it is expected to be fully completed in early March.
As Zheng cotton prices increased after the Spring Festival, the local lint price increased by about 1,000 yuan/ton, but sales were slow. According to industry insiders, 80% of textile companies in Hubei have not purchased new cotton yet, and more than 80-85% of companies are still mainly producing last year’s orders. This year’s new orders are few and mainly concentrated in Jiangsu and Zhejiang. There are two main reasons why companies dare not take orders in large quantities: first, they are worried that the price of cotton and cotton yarn will be inverted, causing the company to lose profits; second, they are worried that the cotton market will be volatile, with sharp rises and falls, and they plan to wait until the market stabilizes before purchasing. </p
