Introduction: One wave after another, bad news comes one after another. The living environment of the textile industry becomes increasingly difficult, and it is like a poor yarn company encountering a bottleneck. From the trade war to the ongoing epidemic, it has brought pain to the textile and apparel industry. From profit compression to having nothing to do, who knows what everyone has been through.
Yarn: Textile companies continue to accumulate inventory and stay together with customers for warmth
Since the outbreak of the epidemic, the great progress of the textile industry has been blocked. The changes before and after February have put yarn companies in dire straits for a long time. Under the shroud of high costs and weak demand, the market is showing a strangulation posture. After March, the domestic epidemic was under control, but overseas epidemics broke out. Many countries blocked their borders and prevented and controlled the epidemic. However, they also blocked the economy. For the weaving industry that “depends on domestic demand for three points and foreign trade for seven points”, suppressed demand Forcing yarn companies to fight bloody battles in difficult situations.
The textile industry is suffering from overcapacity, especially now. Some textile companies can still guarantee shipments with stable domestic demand customers, but they are not optimistic about the long-term vision. During the Qingming Festival, there was a break to test the water, but the shrinkage of demand was serious, and the production-to-sales ratio of textile enterprises declined seriously. The decline and production reduction did not effectively alleviate the operating pressure. In order to resist risks in difficult times, spinning and weaving enterprises are closely linked and extend the credit period to make progress and retreat together.
Among them, the high-count yarn market has been hit hard. Under the risk of inventory shortage, the price of JC Compact 60S has dropped by nearly 3,000 yuan, and the low-end price of the market has already dropped below 26,000 yuan. The situation of conventional yarn is also worrying. Following the decline of raw materials, T/C 65/35 32S reported 14000-14500, and the actual order price of 13500 is not non-existent. (Unit: Yuan/ton)
Raw material stocking: Lack of funds, stocking up is rational
Looking at the near future, the plunge in crude oil has driven the weakness of the polyester sector. Polyester short-term stocks are struggling to cope with weak demand and rising inventories, and market prices are slowly falling. The cotton sector showed a trend of falling first and then rebounding with the help of ICE to resist the decline. However, yarn companies are under great pressure to reduce production and funds are tight, so they are cautious about stocking raw materials and on-demand. The current raw material inventory reserve is controlled at 7-30 days.
Cotton: Lack of necessary demand support, market strength may be just a flash in the pan
1. It is the new cotton planting period, and the expected output will not fluctuate significantly
Research data shows that the total cotton planting area in China this year is 45.501 million acres, a year-on-year decline 5.1 percentage points. Among them, the planting area in Xinjiang was 34.759 million acres, a decrease of 1.6%; the cotton planting area in the mainland was 10.742 million acres, a decrease of 14.87%. We will continue to pay attention to the weather conditions in the later period. If there are no major weather disasters and the yield can be guaranteed, domestic cotton production in 2020/21 can basically stabilize.
2. Market rumors and speculation factors have increased
For a long time, bad news under the epidemic situation has continued to dominate the market, and the weak trend of the cotton market is beyond words, but then There are rumors about plans to stockpile and purchase U.S. cotton. In addition, there have been reports from time to time of economic recovery and the relaxation of the blockade. ICE led the rise and drove the price of Zheng cotton to strengthen. However, the rumors were not confirmed. It was only the long silence that aroused speculation in the cotton market.
3. The imbalance between supply and demand has not changed
my country’s cotton consumption is around 8 million tons, but cotton consumption has halved since February. There is sufficient cotton to be transferred and digested, and during the May 1 period, especially many textile companies are considering taking a break, and the purchase of cotton is bound to slow down. Excluding the speculation, the market returns to fundamentals. Under supply pressure, the probability of market prices rising is low.
Dishort: Mentality returns to rationality, expectations continue to decline
1. Disregarding negative news intermittently, Dishort cash flow remains high
In the first half of the year, driven by non-woven staple fiber, polyester staple factories were out of stock and oversold, and cotton staple fiber stocks were at a low level. Although the trend of polyester is weak and the lack of demand expectations has been taken into account, the polyester short-term has ignored the negative trend and the increase is still obvious. However, since last weekend, the rational mentality of the industry has returned, and the market has cooled down rapidly. Coupled with the collapse of international crude oil, the polyester sector has declined along with the market. In addition, during this period, the cash flow of polyester has continued to reach more than 1,000. As the early support effect weakens, the polyester sector will continue to decline. As the continued sluggish production and sales push up inventories, coupled with the arrival of a wave of textile shutdowns, market prices have gradually corrected. As of today, the mainstream price of semi-glossy white 1.4D*38mm is 6575, -575 compared with last week. (Unit: Yuan/ton)
2. Construction remains at a high level, but the production and sales rate continues to decline
It can be seen that since February, the start-up of polyester staple factories (cotton type) has been rising, from 48.58% to 89.89%, an increase of 41.31 percentage points. When non-woven staple fiber is popular, the start-up It once rose to 91.43%. However, it is a pity that the demand in the spinning field is weak.Since the middle of the middle of the year, the production and sales rate of polyester short-cut factories has plummeted, from 145.09% to 19.56%. Its accumulated inventory pressure has become prominent, forming a reverse suppression on market prices.
Cotton textile manufacturing: The shortage of orders is serious, and the start of production has dropped for 5 consecutive years
According to statistics from Longzhong Information, as of April 23, the comprehensive operating rate of cotton textiles nationwide was around 39.94%, down 0.61 percentage points from the previous month. In terms of air-jet looms, weaving mills are facing the weak market. As early orders are delivered one after another, but there are no follow-up orders, the operating rate of weaving mills continues to decline. The current average operating level of air-jet enterprises has dropped to 42.11%, down from last week. 0.67 percentage points. In addition, regular products are still in stock. Even if there is a low-price promotion, traders have already heard about it at the current price in previous years, but now no one is interested. Some companies have shut down, and some companies intend to take the opportunity to take a break on May 1st and will resume production depending on actual orders. For circular knitting machines, the average operating rate is 37.76%. The overall changes in business start-up this week compared with the same period last week, and some operating loads have rebounded, mainly due to short-term support from domestic trade orders. In addition, some companies have switched from low load to shutdown due to lack of orders.
Taken together, the textile industry under the epidemic situation can be said to have suffered more losses than to make up for its shortcomings. Its supply pressure has been continuously reflected, and the demand gap has become increasingly prominent. Yarn companies are expected to continue to reduce their burden and reduce production on the original basis, or they may focus on taking a break during the May 1st holiday. In addition, polyester staple factories are experiencing high cash flow and continuous accumulation of inventory, and the cost support is weak, giving the yarn market a certain correction expectation. However, the downstream just needs to replenish the goods, and the bargaining transaction will continue to squeeze the spinning profits, and the losses will be in the Unavoidable. </p
