The sales of cotton yarn during the peak season are actually not as good as before, and may improve in late September
Since the end of July, the average transaction price of reserve cotton has basically been in a downward trend, which has only improved slightly in the past few days. However, the transaction rate had previously remained below 60% in the early stages, and a slight improvement in late August did not reverse the weakness. This week, the transaction price seems to have received a boost and began to gradually improve. The possible reason is: Zheng cotton futures have maintained good performance and begun to rebound. In addition, new cotton weighing scales are being opened in many places, injecting a new vitality into the market. Judging from the current purchase price of seed cotton, many textile companies believe that the price of new cotton will be around 14,500 yuan/ton. Compared with the price of reserve cotton, this price seems a bit high. Therefore, the sentiment of textile companies to restock has increased recently. On the morning of September 9, the transaction rate of reserve cotton returned to 100%, and the transaction price also increased.
1 market analysis: market dynamic timely
We all know that the fabric industry starts its small peak season in September. However, as far as the editor knows, the current pure cotton yarn market is still sluggish. The early weakness continued. Some companies even reported that sales during the peak season are not as good as before! Large inventories are one of the causes of headaches for textile companies. At present, although the decline in cotton yarn prices has slowed down, it is still continuing to decline. Downstream orders cannot meet demand during the small peak season. In terms of price, many textile companies have lost confidence. It leads to a vicious cycle. There are no substantial large orders from the downstream to reverse the situation, and they give up and have no confidence to continue. Most of them are shipped at the same price, and prices continue to fall. As cotton prices gradually stabilize, the decline has slowed down in recent days.
At present, some varieties of fabrics are experiencing significant losses. The previous G20 summit caused many textile companies, printing and dyeing companies to reduce production and suspend production. Some printing and dyeing companies even closed down directly, and the atmosphere of pure cotton yarn shipments was deserted. But there are still most varieties that are profitable. At present, the profit level of high-end yarns is relatively ideal, among which C21S has a profit of nearly 2,000 yuan/ton. The mid- to low-end C40S has suffered a huge loss of 1,000 yuan/ton. This situation has lasted for nearly a month. Unsatisfactory shipments and long-term heavy losses have overwhelmed some textile companies. Recently, companies have stopped production and restricted production. Increase, other textile companies have converted some equipment to produce other varieties with relatively good profit levels such as C21S or C32S. The phenomenon of switching production has also led to a sluggish market.
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It is understood that the downstream has begun to pick up in recent times. With the end of the G20 summit, printing and dyeing companies in the fabric workwear industry have also begun to pack their bags and start anew. Some companies said that orders placed under previous squeezes must be completed as soon as possible. Some customers wait and see without placing orders due to the price drop of cotton yarn in August and the relatively generous delivery time. As the decline in cotton yarn has slowed down recently, and due to order delivery considerations, customers with orders will gradually turn to firm orders. Natural cotton traders in other regions also have plans to purchase. The market will not be prosperous in September, but there will still be urgent demand. The natural cotton market may see a relatively obvious improvement in late September.
In summary, the price of cotton yarn is more likely to continue to decline slightly in the short term, and the shipment volume will gradually increase in the later period, but whether it can happen In the early stage, supply exceeded demand, which made it more difficult. In addition, when prices can rebound depends on when downstream demand can be released. Overall, the turnaround in late September is not far away.
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