It’s mid-August in the blink of an eye, and more than half of 2020 has passed. Affected by the COVID-19 epidemic at home and abroad, the textile industry has been in a downturn. Orders for mid- to high-end cotton yarn products have been decreasing day by day, textile production capacity has gradually shifted to medium and low yarn counts, and competition in the domestic textile industry has intensified. At the same time, since July, the inventory of bonded and customs-cleared cotton yarn at ports has continued to rise slowly, which has made it worse for the domestic textile industry.
It is understood that many cotton textile enterprises in Shandong Liaocheng area, led by Guanxing Group, not only bear the pressure of market sales, but also bear the burden of heavy employment and Although they have heavy social responsibilities, they have not been overwhelmed by difficulties and have adopted various methods to resolve risks. They have not stopped a spindle, not taken a day off, and have not reduced workers’ wages by a penny. They have become the best in the industry during the epidemic. .
Since July, international cotton futures and Zheng cotton futures have been in a volatile upward trend. On August 7, the ICE futures December contract was at 64.85 cents/pound, and the Zheng cotton CF2009 contract soared to 12,525 yuan/ton, setting a recent high. At the same time, the increase in freight rates in Xinjiang has also increased the cost for companies to export cotton from Xinjiang. Cotton futures and spot prices have increased by about 200 yuan/ton to varying degrees, but it is difficult to increase yarn prices. The increase in cotton distribution costs and the low prices of downstream products have constituted a new contradiction for textile enterprises.
July and August are the hot and humid seasons in the northern region, making workshop work particularly difficult. If cotton contains too much sugar, it will easily get wrapped around the rollers, which will affect product quality and reduce output. If the company removes sugar, another cost will be added. Purchasing raw materials with low sugar content reduces the purchasing area, which also brings deep confusion to enterprise production.
“The sun always shines after the storm.” Although companies are facing many difficulties, they are still struggling to find solutions and strive to break out of the cocoon. The timely release of national cotton reserves not only stabilizes cotton prices, but also calms the anxious hearts of textile enterprises. In terms of raw material inventory, the company still keeps it as low as possible while ensuring product quality, and achieves “short, smooth and fast” procurement of raw materials to product sales. The company also improves product quality to increase product market competitiveness, improve management efficiency, reduce unnecessary investment, strictly connect with terminal brands, reduce product intermediate links, implement price-based sales and other related measures to ensure the benefits of related varieties. of maximization.
Since August, with the gradual control of the epidemic, foreign trade procurement in some countries has gradually resumed, and corporate foreign trade orders have rebounded, and the yarn orders tend to be mid-to-high-end. . This recovery phenomenon has reduced the competitive pressure of domestic enterprises and significantly increased the digestion of high-quality Xinjiang cotton, achieving a virtuous cycle of high-end raw materials and products.
Raw materials are rising day by day, and rainfall continues. Enterprises are moving forward with heavy burdens and looking forward to the textile spring. “Golden Nine and Silver Ten” are an inflection point for the recovery of my country’s traditional textile market. In the future, with the gradual subsidence of overseas epidemics, the easing of Sino-US trade disputes, the implementation of relevant preferential policies for textile enterprises by the state, and the perseverance of textile enterprises themselves, With perseverance, the spring of the textile industry will surely come early.
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