According to feedback from cotton textile companies in Jiangsu, Henan, Hebei and other places, inquiries and shipments of fabrics and gray fabrics have softened since mid-January, and some spinning mills, weaving and clothing companies will enter a holiday shutdown rhythm around the end of January. The consumer terminal began to waver and gradually passed to the upstream cotton yarn and cotton. Although the current quotations of cotton yarns in cotton spinning mills and various light textile markets in coastal areas remain high and stable (the ex-factory prices of high-priced and high-count combed yarns of a few companies have fallen), the market sentiment has become differentiated, from a “seller’s market” before mid-January to a “seller’s market”. The “buyer’s market” has adjusted, and the number of cloth factories and middlemen willing to stock before the Spring Festival continues to decrease.
A medium-sized textile company in Zhengzhou, Henan Province said that although the transaction volume of gray cloth and cotton yarn has slowed down significantly compared with previous weeks, it will not lower the ex-factory price before the Spring Festival. First, the stock of gauze this year is low (only 7-10 days). A large amount of working capital is occupied; secondly, the current cost of installing machines and stocking gauze is relatively high (CF2105 contract is purchased at a price above 15,000 yuan/ton), there is not much profit margin, and the natural willingness to lower prices is not high; thirdly, for the first half of 2021 The cotton and cotton textile markets continue to be promising, and repeated adjustments to quotations are unacceptable to customers, which is not conducive to post-holiday sales. Fourth, this year, traders’ gauze stocks in various light textile markets in Guangdong, Jiangsu, Zhejiang, Shandong and other places are relatively low. As long as the domestic epidemic is effectively prevented and controlled, , if Sino-US relations do not deteriorate, a large number of intermediate links are expected to replenish their inventories after the year, which will play a “fueling” role in the supplementary increase in gauze prices. In addition, although the price of C32 cotton yarn with the same count is 500-700 yuan/ton, the quotations of yarn mills in India, Pakistan, Vietnam and other countries, as well as bonded and customs-cleared outer yarns at ports, are very strong, and the bargaining space is very narrow.
Amid the bullish sentiment on cotton and cotton gauze after the Spring Festival, some large textile companies are somewhat cautious and conservative, believing that the market has not returned to normal and the sustainability of the return of foreign trade orders remains to be seen. The additional tariffs imposed by the United States on Chinese textile and clothing imports have not been cancelled, and the trend of “de-Sinicization” of US textile and clothing brands and retailers will be difficult to reverse in the short term. The broad ban imposed by the United States on Xinjiang cotton products will have a short-term impact on my country’s textile and clothing exports. The Biden administration has launched a huge fiscal stimulus plan, and the trend of the RMB exchange rate is very important. Once it enters the appreciation channel again, it will be more difficult for textile and clothing companies to receive orders. </p
