As August is about to enter, new cotton will also enter its maturity stage, but the cotton spinning market is still sluggish and deserted. A person in charge of a textile company asked the author, “Will there be spring in the yarn market this year? The difficult days are so difficult that we can no longer sustain it.”
At the beginning of 2020, affected by the new coronavirus pneumonia epidemic , most textile companies have sluggish production and sales and difficulty in capital turnover. Coupled with the Sino-US trade war and the disordered rhythm of the off-peak and peak seasons, some textile companies have stagnated. In the first half of the year, the operating conditions of all textile companies were poor. At present, some companies have entered the shutdown stage, and most employees mainly take vacations. It is expected that more companies will stop production in August. In the future, there are still many uncertainties in the cotton spinning market. Can spring come earlier?
China’s economy is slowly recovering. 1. The profit growth rate of industrial enterprises has turned from falling to rising. Data released by the National Bureau of Statistics on July 27 showed that in the second quarter, the profits of industrial enterprises increased by 4.8% year-on-year, after falling by 36.7% in the first quarter. Especially in May and June, profits increased by 6.0% and 11.5% respectively, and the growth rate accelerated month by month. .
2. The total operating income and total profits of state-owned enterprises achieved monthly year-on-year growth for the first time this year. According to data released by the Ministry of Finance on July 23, in June, the total operating income of state-owned enterprises increased by 7.1% compared with the same period last year, and total profits increased by 6.0% compared with the same period last year.
3. Central enterprises achieved positive monthly net profit growth for the first time. Data recently released by the State-owned Assets Supervision and Administration Commission showed that central enterprises achieved a net profit of 166.48 billion yuan in June, an increase of 64.63 billion yuan from May and a year-on-year increase of 5%. This is the first time this year that monthly net profits have achieved positive growth. The positive growth in profits means that these companies are making more and more money, and it also confirms the continued recovery momentum of China’s economic V-shaped rebound.
Chinese enterprises’ demand for cotton yarn has increased significantly. According to customs statistics, my country’s cotton imports in June 2020 were 90,000 tons, a month-on-month increase of 29%, and a year-on-year decrease of 44%; while my country’s cotton yarn imports in June were 150,000 tons, a year-on-year decrease of only 6.5%, and a month-on-month increase of 50%. . Market participants believe that the large increase in the number of imported yarns is first of all a reflection of the rapid recovery in market demand. In May and June, domestic sales orders postponed due to the epidemic were fully released, and consumer demand for cotton yarns with counts of 40S and below (including OE yarns) rebounded in a short-term “retaliatory” manner; while some domestic small and medium-sized yarn mills were slow to resume work and production and lacked raw materials. Due to reasons such as high costs, low and medium count yarn output, and insufficient inventory, purchasing on-site, bonded or customs-cleared Vietnamese yarn and India-Pakistan yarn has become an inevitable choice for textile and garment enterprises and middlemen.
Therefore, we judge that China’s market is slowly recovering. As the demand for imported yarn picks up rapidly, the spring of domestic yarn will also be closer and closer.
Domestic textile enterprises are accelerating the survival of the fittest. According to the author’s survey of textile enterprises in Shandong, Hebei, Guangdong and other places, since July, many small and medium-sized enterprises have completely withdrawn from the textile industry, and the number of enterprises that have suspended production and taken holidays has increased to more than 30%. However, there are still some companies with strong strength and high technological level that are still accelerating their development. These companies have seized the market gaps left by the exit of small and medium-sized enterprises.
In fact, yarn is waiting for an opportunity to reach an inflection point. Maybe it will be in September-October of the “Golden September and Silver Ten”; maybe it will be after the overseas epidemic is under control, maybe it will be when the Sino-US trade dispute makes some progress. In short, just when everyone feels pressure is coming, market opportunities may also be coming. </p
