Zheng Cotton’s main contract CF2105 exceeded 15,610 yuan/ton, setting a new annual high. The market also continues to be optimistic about the production and sales situation of cotton yarn and gray fabrics after the Spring Festival. Some cotton spinning mills in Jiangsu, Anhui, Henan and other places have raised cotton yarn quotations again in recent days by 200- 500 yuan/ton (the increase for OE yarn is relatively small, while the increase for high-count yarn above 50S is slightly larger). At present, many weaving factories and printing and dyeing, fabric, and clothing companies in coastal areas have taken holidays one after another. The increase in yarn prices lacks effective transaction support, and they are still in the observation stage of price increases by textile companies.
Several large and medium-sized yarn mills said that the spot price of cotton yarn is sensitive and they follow the trend of Zheng cotton and Zheng cotton yarn mainly for the following reasons:
First, most cotton textile mills have limited replenishment efforts before the end of January, and are still based on the operational idea of buying as they are used. Once the prices of cotton, polyester staple fiber, etc. fluctuate greatly, cotton spinning mills will immediately take the initiative to ask for help. Second, the cotton yarn inventory of spinning enterprises is generally low (some manufacturers only have about a week of gauze inventory), and there is a subjective willingness to accumulate a small amount of inventory, which is conducive to arrangements. Receive orders after the holidays;
Third, cotton textile companies believe that the new crown epidemic will be eliminated in 2021, and the global economy, trade, transportation, consumption, etc. will usher in a comprehensive rebound or even With retaliatory growth, cotton textile and clothing production and sales will also be bright;
Fourth, central banks of various countries will continue to release water in 2021, releasing sufficient liquidity to support the real economy and full employment. Therefore, Inflation expectations are strong, and commodities such as cotton and yarn have a bullish basis;
Fifth, with Biden taking office, Sino-US relations are expected to ease, and the United States is evaluating the first phase of China-U.S. During the economic and trade agreement, additional tariffs on US$370 billion of Chinese goods will be suspended. In a recent interview, Biden also said that the U.S.-China relationship may be one of the most important relationships in the world. There will be “fierce competition, but there is no need for conflict” between the United States and China.
However, a textile company in Dezhou, Shandong Province believes that raising the ex-factory price of cotton yarn before the Spring Festival may be risky. After all, many yarn mills only place orders until the end of February, and medium and long-term orders are not sufficient. Zheng Cotton may face a round of correction after breaking through the previous high of 15,610 yuan/ton. The main reason is the lack of transaction support. Whether the yarn price will follow the adjustment makes textile companies in a dilemma. In addition, the rising price of cotton yarn has exerted pressure, causing the costs of weaving and clothing companies to rise after the holiday, and the willingness to accept domestic sales and foreign trade orders has declined. The progress of cotton yarn replenishment has accordingly slowed down, and consumption may be overdrawn in advance. </p
