Since entering 2021, the yarn market has had a good start. The overall market sales have been smooth, especially in the first half of January, both volume and price have increased. As of February 4, 2021, CY C32S pure cotton yarn closed at 23,990 yuan/ton, which was the same as the same period last week.
For cotton raw materials, as of February 4, China’s cotton CC 3128B index closed at 15,266 yuan/ton, higher than It fell by 32 yuan/ton this week. But yesterday Zheng Mian was more surprising. Perhaps few people could have expected that Zheng Mian suddenly started to rise sharply yesterday afternoon. From a fundamental perspective, Zheng Mian has the motivation and objective conditions to stand firm in the short term. First, the recent market price of Zheng Cotton’s main 05 contract continues to be “inverted” with the 3128 spot price, and there is a demand for it to move upward. According to surveys, in recent days, the quotations of Xinjiang cotton processing enterprises’ 31-level “Double 28” machine-picked cotton are generally 15,300-15,400 yuan/ton, while the CF2105 contract once fell below 14,900 this week, and the cotton futures are “inverted” by more than 500 yuan. / ton; secondly, although the main force of Zheng Cotton has broken through 15,000 and 14,900 in the past week, not only the terminal quotations of cotton yarn, gray cloth and other products have been smaller than the decline, but also the domestic cotton spot has generally been reduced by about 100 yuan / ton. Therefore, on the premise that the terminal’s digestion and acceptance capabilities are relatively strong, Zheng Mian is suspected of “flip-flopping”; thirdly, as of February 4, the number of Zheng Mian’s warehouse receipts and effective forecasts were 17,008 and 2,102 respectively, year-on-year The declines in the same period last year were still as high as 53.71% and 63.4%. In the case of Xinjiang cotton production in 2020/21 increasing by 200,000-300,000 tons compared with the previous year, Zheng cotton warehouse receipts and forecasts have been significantly cut in half. The actual pressure is relatively light, while Zheng The cotton market is small and the amount of funds is low; in addition, it is mainly industrial enterprises, so it is easy to be leveraged by funds to increase the price.
Since December last year, cotton yarn sales have improved significantly, and prices have risen again. As a result, the supply of textile companies is still limited. The actual market demand in January is still good, and the quotations of textile companies have increased to host. As of February 4, the average daily inventory of finished cotton yarn products in textile companies was around 4.6 days. However, from a breakdown, in the second half of January, the domestic epidemic situation recurred, and the mid- to downstream market began to be cautious, began to wait and see, reduced stocking, and prices gradually consolidated. From the perspective of profits, textile companies experienced a long period of losses in 2020. Entering the fourth quarter, the profit levels of textile companies gradually recovered and improved. Especially after entering December, with the sharp rise in cotton yarn prices, the current profits of textile companies and the profits calculated from cotton in stock have turned positive and increased significantly. The current profits have exceeded 1,000 yuan, and the profits are very considerable. Putting aside the problem of restricted personnel movement due to epidemic control, from the perspective of the enterprise itself, it is the best time for textile enterprises to repair their performance and earn profits. Currently, the postponement of vacation time, shortening of vacation days, and scheduling of orders and rushing production are the best time for textile enterprises to repair their performance and earn profits. The best choice for the enterprise itself.
Recently, the price of outer yarn, which has always been high, has finally become a little “loose”. As of February 4, FCY INDEX C32S closed at 24,239 yuan/ tons, down 28 yuan/ton from the same period last week. Among them, the decline in printed yarn was particularly obvious. The reason is mainly because India’s domestic textile enterprises have not started enough operations and India’s domestic demand for yarn is good, so the quotations are obviously inflated. The price of printed yarn is seriously inverted compared with that of domestic yarn, which has led to a significant reduction in external demand. On the other hand, the increase in profit margins of local Indian weaving mills has not kept pace with the increase in cotton yarn prices. After mid-January, purchases by local Indian weaving mills began to decline, and local buyers were hesitant and expected price cuts. After this wave of downward adjustments, the price difference between the internal and external price of imported yarn began to narrow. Although it is closer to the psychological price of Chinese manufacturers, most varieties are still slightly inverted or flat, and there is no obvious profit margin. Therefore, actual buying hesitation, Inquiries have increased, and most traders expect prices to fall further before restocking. However, India recently announced that it will impose additional tariffs on imported cotton. This news has given some support to Indian cotton. The outer market of Indian yarn has also been affected by this and has temporarily stopped falling. If Indian cotton is stronger in the later period, the decline in the outer market of Indian yarn will be limited. The specific needs to be determined. Depending on the size of the impact of the policy, it is initially expected that the outer market of printed yarn will still be weak with a high probability. Another reason why China is hesitant to buy is that India’s current shipping schedule is mainly from March to April. If the order arrives at the port, it is likely to be after April. China’s traditional peak season for textiles and clothing will soon be missed, and exchange rate fluctuations are also considered. Within the range, the current spread is therefore still hesitant. </p
