According to feedback from cotton textile enterprises above designated size in Jiangsu, Shandong, Henan and other places, inquiries and shipments of 40S and above high-count carded yarn and combed yarn (including 40S) have increased significantly since early September compared with June and July. Weaving mills, clothing companies and retailers are more willing to accept the increase of 300-500 yuan/ton for cotton yarn. However, not only the transaction atmosphere for OE8-16S and low-count ring spinning yarn is weak, but also the consumer terminal’s yarn price is 200 yuan/ton. The acceptance of the increase of -300 yuan/ton is low.
A yarn mill in Jiangsu said that due to the negative impact of the COVID-19 epidemic and Sino-US economic and trade frictions, the consumption of high-end gauze and clothing has experienced a very significant downgrade. From June to August, many domestic yarn mills have reduced or even suspended the production of 60S. and above count cotton yarn, and switched to spinning 40S and below medium-low count and medium-low cotton yarn. “Maintaining production, employment, and sales volume” became the top priority at that time.
Textile companies in Zhengzhou, Henan, Zibo, Shandong and other places believe that the short-term improvement in high-count carded and high-count combed yarn transactions is related to the increase in foreign trade orders in some countries and regions in August and September and the continuous domestic sales orders in the spring and summer of 2021. It is directly related to the issuance, but general orders can only be supported until mid-October. Foreign trade and domestic demand orders for more than one month are relatively rare. Therefore, the confidence of cotton textile enterprises is still insufficient. Cotton and other raw materials are bought as they are used, while gauze continues to be taken. Inventory Measures.
Some cotton-related enterprises and institutions believe that the main reasons that currently prevent cotton textile mills from producing at full capacity are as follows: First, the recent second outbreak of the new crown epidemic in some countries in Europe, Asia and South America. The prevention and control situation requires adjustments to social, trade, logistics and other measures, and the introduction of more targeted measures; second, the US government may ban all cotton products in China’s Xinjiang region from next month, creating resistance to the export of Chinese textile and apparel companies; Third, some small and medium-sized cotton textile enterprises are under great pressure on working capital, and the profit, production and sales situation is not optimistic. At present, downstream fabric factories, clothing, and trading companies generally purchase cotton yarn for a period of 1 to 3 months.
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