After cotton surges, the operating situation of textile enterprises becomes further severe
Abstract: In the past two days, Zheng cotton has been in a price rebound. Driven by the market price of Zheng cotton, cotton companies have begun to stir up commotion in their lint quotations. The delivery price of lint cotton on the “Double 29” and “Double 30” platforms in southern Xinjiang has risen to 16,000- 16,200 yuan/ton. There are more textile companies and traders asking for prices, but the actual transactions are still insufficient. Reasons for the rise in cotton prices Analyzing the reasons for the rise in cotton prices, it is not unrelated to the recent amplification of Xinjiang cotton transportation pressure and speculation. Some experts in the industry
Key words:
In the past two days, Zheng cotton has been in a price rebound. Driven by the price of Zheng cotton, the lint quotations of cotton companies have begun to commotion. The delivery price of lint cotton on the “Double 29” and “Double 30” platforms in southern Xinjiang has risen to 16,000-16,200 yuan/ton. More textile companies and traders have made inquiries to see the goods, but the actual transactions are still insufficient.
Reasons for the rise in cotton prices
Analyzing the reasons for the rise in cotton prices, it is not unrelated to the recent amplification of Xinjiang cotton transportation pressure. Industry insiders analyze that strict inspection of overloading will have a greater impact on both cotton warehouse receipts and spot goods. The future cotton transportation situation in Xinjiang depends on transportation policies. If transportation capacity continues to be tight, it will affect the cotton supply of mainland textile companies, thereby affecting prices. Coupled with the push by textile companies to replenish their stocks, it is possible for Zheng cotton to be bullish. In addition, the RMB exchange rate continues to fall, other commodities have experienced large-scale increases, and factors such as huge amounts of money flowing out of the property market and stock market into the futures market have also had a greater impact on cotton. However, although the financial attributes of cotton may cause commodity prices to deviate significantly from the intrinsic value, such deviations are generally short-term. In the long term, supply and demand are still the main factors that determine prices.
Weak downstream demand
According to the China Cotton Industry Association, currently there is not much reserve cotton left in the early auctions by textile companies. Some textile companies have the need to replenish their stocks, but the textile companies are unable to absorb the sharp increase in cotton prices. . The “Double 29” Xinjiang cotton delivery price is about 16,000 yuan/ton. Taking into account the 500 yuan/ton transportation subsidy, the factory cost reaches 16,500 yuan/ton (an increase of about 2,000 yuan/ton compared with the use of reserve cotton). The current prices of carded 32S and combed 40S are around 22,800 yuan/ton and 26,000 yuan/ton respectively, which is only about 100 yuan/ton higher than the beginning of November, far less than the rising rate of cotton prices. Textile enterprises report that the recent sales of pure cotton yarn have been weak, and combed high-count yarns are rarely interested. Enterprise orders are not in good shape, especially polyester-cotton yarn sales have dropped significantly, and large orders are rare.
Domestic cotton prices are soaring, but international cotton prices, represented by US cotton, have not risen. At present, the price difference between domestic and foreign cotton has once again widened to about 2,000 yuan/ton, and Xinjiang cotton is transported out of Xinjiang. Insufficient, coupled with restrictions on imported cotton quotas, domestic production capacity of C32S and below count cotton yarns continues to decline, and the proportion of small and medium-sized enterprises reducing production is still increasing. Low-count yarns from India, Pakistan, Vietnam and other countries will once again enter the Chinese market in large quantities. It is not conducive to the development of textile enterprises.
Textile enterprises have a heavy burden of raw material costs and the operating situation is further severe
Entering November, domestic cotton prices continued to rise after a slight shock. At this time, international cotton prices stabilized, and the price difference between domestic and foreign cotton expanded to about 2,000 yuan/ton. Judging from the domestic cotton spot price index, the standard cotton price index loosened slightly at the end of October, but the short-term decline did not effectively alleviate the problem of expensive cotton for enterprises. In fact, cotton market prices are still strong. According to the company, the price of Xinjiang cotton from Xinjiang to the factory is as high as 16,200 yuan/ton, and the price of cotton in the main cotton producing areas in the mainland is also close to 15,800 yuan/ton.
Internationally, the CotlookA index has been stable and slightly decreased from October to November. It is currently maintained at around 75-80 cents/pound. After discounting 1% tariff, the RMB is about 13,000- 13,800 yuan/ton. Judging from the quotation situation of imported cotton ports, the recent Indian new cotton has a high moisture content, the overall quality is not optimistic, and the export volume is limited. The quotation is around 15,000 yuan/ton; while the quotation of US cotton has increased steadily, and the new US Department of Agriculture The report reduces the production of US cotton, which is helpful to boost the price of US cotton. The factory price of US cotton is about 16,000 yuan/ton; the current import demand for Australian cotton is relatively strong, and the quotation of cost-effective cotton is 16,850 yuan/ton. According to customs data, my country’s imports of Australian cotton ranked first in September. In the first nine months, my country imported a total of 655,000 tons of cotton, a year-on-year decrease of 43.6%.
Compared with the firm price of cotton, the price of viscose staple fiber has lost support since the end of October and has been declining. As expected by the market, the market’s rigid demand is insufficient, and the price of viscose staple fiber has been declining.�The RMB is about 13,000-13,800 yuan/ton. Judging from the quotation situation of imported cotton ports, the recent Indian new cotton has a high moisture content, the overall quality is not optimistic, and the export volume is limited. The quotation is around 15,000 yuan/ton; while the quotation of US cotton has increased steadily, and the new US Department of Agriculture The report reduces the production of US cotton, which is helpful to boost the price of US cotton. The factory price of US cotton is about 16,000 yuan/ton; the current import demand for Australian cotton is relatively strong, and the quotation of cost-effective cotton is 16,850 yuan/ton. According to customs data, my country’s imports of Australian cotton ranked first in September. In the first nine months, my country imported a total of 655,000 tons of cotton, a year-on-year decrease of 43.6%.
Compared with the firm price of cotton, the price of viscose staple fiber has lost support since the end of October and has been declining. As expected by the market, there is insufficient rigid market demand and the price of viscose staple fiber is artificially high. There are too many ingredients, and the decline deepens. The price trend of polyester staple fiber is exactly the opposite. After several months of decline, it stopped falling and rose after mid-October. In early November, consistent with the price trend of bulk commodities, the prices of textile and chemical fiber raw materials generally increased, and the market for most chemical fiber raw materials was relatively active.
The association understands from various aspects that currently spinning and weaving enterprises are still facing the dilemma of insufficient downstream demand, insufficient openings, weak production and sales, high pressure to destock, and further severe operating conditions. In particular, the current high cotton price poses a huge challenge to controlling production costs. Subsequent product price increases are subject to various restrictions. Generally speaking, cotton procurement is not active at present. Wait-and-see inquiries are the main focus, and textile companies are also cautious in accepting orders. From the perspective of the futures market, the recent price fluctuations of Zheng Cotton’s 1701 contract have intensified. New York cotton futures have performed optimistically in the past two days. Individual companies have reported that with the increase in the next round of spinning raw material replenishment, cotton prices are less likely to fall. There are also Some believe that downstream demand has not started and there is no strong support for rising raw material prices. Therefore, as the end of the year approaches, textile companies need to be more cautious in their operations, focusing on market development and increasing the added value of products while striving to control production costs.
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