After the Spring Festival, while the COVID-19 epidemic continues, yarn bucks the market trend and rises. According to feedback from some enterprises in Shandong, Hebei, Jiangsu and Zhejiang, since February 10, in less than a month, domestic conventional yarn has increased by 200-400 yuan/ton, and individual high-end and high-count combed yarn has increased by nearly 1,000 yuan/ton.
However, with the gradual control of the epidemic, yarn has shown a weak upward trend since this week. Why? According to market introduction, there are mainly the following reasons:
First, the downstream operating rate has increased and the market supply has increased. As the resumption of work and production accelerates across the country except for Hubei and Wuhan regions, the startup rate of textile enterprises has gradually increased, and market supply has increased. On March 5, the person in charge of a medium-sized textile company in Dezhou, Shandong Province, introduced that the factory mainly produces carded 21S, 32S and combed 32S. The current production capacity has restored to about 50%. Due to transportation capacity and orders, the inventory of finished products is steadily increasing. middle. The increase in inventory brought about by the increase in operating rates has become a “stumbling block” to price increases. In addition, in order to encourage enterprises to resume work and production and restore production capacity as soon as possible, the government has recently introduced a number of “tax exemption and fee reduction” policies, which have obvious effects. However, because the business and trade system has not yet been fully restored, enterprises that are resuming production quickly will suffer greater consequences.
Second, the rise in gray fabric prices has come to an end for the time being. Since mid-to-late February, the prices of most gray fabrics have risen rapidly. According to feedback from traders in the Shengze area, due to the impact of the epidemic, the production capacity of weaving enterprises will be low after the new year, resulting in a shortage of some gray fabrics. Especially for some best-selling varieties, such as imitation silk, T400, etc., many traders have stocked up. Data show that since mid-February, most categories of gray fabrics have increased by 0.2-0.4 yuan/meter, and some have increased even higher. The rise in gray fabrics directly drives the rise in yarn prices. However, with the recent increase in gray fabric production capacity, supply and demand have gradually stabilized. The increase in gray fabrics has been weak, and some weaving mills have even reduced prices, which has put greater pressure on yarns.
Third, the lack of orders is the biggest obstacle to the rise of yarn. According to many traders in Shandong, Hebei and other places, most of the yarn price increases some time ago were “empty increases”, and actual transactions were very few. Recently, the orders received by textile companies have been very unsatisfactory. Large factories still have a small number of new orders, while small factories have almost no chance of receiving new orders. At the same time, affected by the global spread of the epidemic, international and domestic cotton prices have fluctuated sharply, which has also made companies lose reference for yarn quotations. On March 5, as the global epidemic intensified, terminal consumption was deeply hit. Many international orders were canceled and contracts were broken. It is expected that the number of orders received by textile companies will continue to decrease in the near future.
To sum up, although more than 95% of domestic textile companies have resumed work, due to low orders and high inventory pressure, most textile mills are unable to achieve full capacity production. Under the situation of oversupply, yarn There are many resistances to the upward trend, and there may be a risk of a correction in the near future. </p
