In mid-March, the production capacity of textile enterprises across the country has basically recovered to about 80%. After experiencing the previous short-term “hot sales” market, with the gradual recovery of production capacity, the price of cotton yarn has gradually cooled down. Currently, orders have become the largest The problem. As of March 12, the domestic average price of C32S closed at 20,608 yuan/ton, a decrease of 40 yuan/ton compared with last week.
From the perspective of cotton raw materials, due to the Saudi Arabian crude oil price increase in the past few days, Due to the impact of the war and the recent geometric outbreak of overseas epidemics, global commodities are “continuously falling”. Since February 21, Zheng cotton has fallen by 1,300-1,500 yuan/ton. On February 21, the main closing price of Zheng cotton was 13,265 yuan/ton. In just one week, it fell to 12,180 yuan/ton as of February 28. It fell by more than 1,000 yuan.
Affected by the epidemic, the transfer and sales of Xinjiang cotton have been greatly restricted. Affected by raw materials, cotton yarn prices are also difficult to increase. For textile companies, the risk of raw material inventory is also increasing. It is understood that most textile companies currently prepare raw materials for the year before, and most inventories are at about a month’s level. The converted cost is no longer profitable. Most companies have now given up on the fantasy of “gold, three, silver and four” and adopted the principle of determining production based on sales and making cash king.
Looking at the downstream gray fabric market, compared with the startup load in previous years, this year’s startup load index is significantly lower. As of now, the startup load index of gray fabrics is insufficient. 50%, and the recovery speed has also dropped significantly. The main reason is that although the textile city markets in various places have opened one after another, most of them are empty. Some weaving mills consider factors such as orders and inventory transfer to control the start-up of weaving mills.
On the other hand, although some weaving factories have resumed work for many days, there are many out-of-town employees, and some employees have not yet returned to work, resulting in the inability to start up. From the perspective of inventory, the inventory dropped significantly after the weaving mills resumed work in 2020. Due to the delay in resumption of work due to the epidemic, downstream customers mostly urged the weaving mills to deliver goods. But similarly, weaving mills are also facing the pressure of insufficient new orders, and market confidence has dropped compared with a year ago.
Recently, the characteristics of imported yarn are: the overall price has dropped, and the price has dropped both internally and externally. According to traders, affected by the spread of the epidemic around the world, market purchasing sentiment is not high and prices are generally weak. Buyers tend to place orders when prices are low and shy away when prices are high.
Most of the industry’s assessments of economic performance in the first half of 2020 are very pessimistic, and they even feel that the global economy is at risk of shutting down. Under this background, manufacturers and traders are all gloomy and are destocking and cashing out to escape the market as soon as possible. The inventory of imported yarn has also risen to unprecedented heights.
Looking at different countries, the current major exporting countries of pure cotton yarn have lowered the price of cotton yarn. Among them, due to the difference in quality between Indian (red line) and Vietnamese cotton yarn (orange line), and the Indian tariff in China is 3.5%, while the import tariff in Vietnam is 0, only the absolute price of Indian yarn is lower than that of Vietnamese cotton yarn. Have a competitive advantage in the Chinese market. However, data from the past year show that the external quotations of printed yarn and cross-woven yarn are almost stalemate, but in China, the advantage of Vietnam C32S is more obvious.
Generally speaking, in the context of sharp fluctuations in raw materials and a downward focus, yarn is encountering “top-down” resistance. If raw materials and yarn continue to decline in the near future, the survival of enterprises will be in doubt. Big problem. </p
