At present, the domestic cotton spinning industry chain seems to have undergone great changes, and raw materials are forcing downstream terminals to follow the rising trend. From the surface, pressure is being transmitted to downstream and terminal links, and the main contract of Zheng Cotton has exceeded the 14,000 yuan/ton mark.
From the survey, the sharp rise in Zheng cotton not only caused cotton processing companies and traders to adjust their quotations multiple times a day, but also encountered difficulties in the quotations of cotton yarn and gray fabrics (frequent adjustments in quotations made it unacceptable for end customers) , some cotton textile mills in Henan, Shandong, Jiangsu and Zhejiang have to adopt various methods to respond by suspending quotations and suspending orders, in order to reduce losses and risks as much as possible. A textile company in Zibo, Shandong Province said that in the past half month, the ex-factory prices of C16-C40S carded yarn and JC40S and above combed yarn have increased by 300-500 yuan/ton and 500-1,000 yuan/ton respectively (the actual transaction is slightly discount), but the increase is still significantly lagging behind that of cotton. If spinning yarn is purchased at the current cotton price, not only will the profits of the spinning mills not increase, but their losses will expand.
The sharp rise in cotton prices has three main impacts on downstream enterprises: First, the “Double 11” foreign trade orders and spring and summer orders received in August and September face relatively large losses, and negotiated termination or breach of contract may even become This is an effective way for some cotton textile companies to avoid risks; secondly, yarn prices passively follow the rise, but it is more difficult for buyers such as downstream weaving mills and middlemen to accept it. Textile companies need to make concessions in terms of payment methods, account terms, etc., otherwise “Destocking and reducing risks” will become an empty talk; thirdly, the prices of cotton and cotton yarn have severely damaged the market situation that has just recovered in exports, accelerating the transfer of orders from Europe, the United States, the Middle East and other major textile countries such as Vietnam, Indonesia, India and Pakistan, and the fall of the new coronavirus epidemic. Winter is “coming back”, and China’s textile and clothing industry is hardly optimistic in the first half of 2021.
A cotton textile group in Yancheng, Jiangsu Province said that the recovery increase in cotton prices in 2020/21 was expected, but the daily increase in cotton prices after the National Day by nearly 500 yuan/ton was unexpected (raw materials Textile companies that “buy as you go” are suffering even more). On the one hand, purchasing personnel go to Qingdao, Zhangjiagang and other ports to inquire and purchase low-price, moderate-quality bonded cotton or customs-cleared cotton; on the other hand, gauze quotations are forced to increase, passing the risk of a surge in raw materials to downstream terminals as quickly as possible . In addition, the company has negotiated with customers in Guangdong, Zhejiang and other places on contract prices, delivery deadlines, etc., and hopes that customers will increase the price of cotton yarn by 300-500 yuan/ton to continue to perform the contract or terminate the contract (the contract stipulates that cotton prices fluctuate by more than 1,000 yuan/ton). Yuan/ton, the buyer and the seller renegotiate and sign the contract attachment), otherwise the company can only passively break the contract. Judging from the feedback from some textile enterprises in coastal areas, the sharp increase in the prices of cotton yarn and gray fabrics has caused the enthusiasm of end-use fabrics, clothing and other enterprises to inquire and purchase significantly less than in September, and the “Golden Nine and Silver Ten” market may end early. </p
