The trend of the commodity market this year seems to be more important than in previous years. From mid-May to the present, both ICE and Zheng Cotton have been on a “roller coaster”. After the sharp rise, they jointly dived. Zheng Cotton’s main contract CF1709 fell from 16540 yuan/ton to 15700 yuan/ton. tons, a decrease of 5.08%. The market is turbulent and unstable, especially Zheng cotton, which has plummeted and surged. The future is unclear, and the cotton spot is even more miserable. Against this background, cost pressure has risen sharply, cotton yarn and gray fabrics have struggled to rise, making life for textile companies even more difficult!
“Cotton madness” makes textile companies wait and see, causing cotton sales to stagnate
It is understood that the recent rise and fall of cotton futures has been unstable and has changed frequently. Some textile companies that use point-price transactions generally wait and see. In terms of spot goods, some companies purchase raw materials from cotton companies mainly on credit due to financial constraints. We learned from cotton traders that cotton sales have been quite sluggish recently, and some even said that unless there is a sharp rise in the market, there is little trading volume. It can be seen from the recent transaction rate of reserved cotton that due to factors such as rising futures prices, textile companies did have some replenishment behavior last week. Starting this week, the transaction rate of reserved cotton fell back to about 60%, maintaining a higher level than the previous period. Mainly due to cotton yarn Lack of support downstream.
The price of yarn count has been reduced by 500 yuan/ton, making life even more difficult for textile companies!
This year, textile companies seem to have entered the off-season ahead of schedule. Some medium and large-scale textile companies said that since mid-to-late April, the downstream gray fabrics have been depressed, and it is relatively difficult to receive cotton yarn orders. Textile companies in Henan, Hebei, Jiangsu, Zhejiang, Shandong and other places have reported that the demand for cotton yarns of 50S and above Incoming orders have decreased, and “short-term, flat, and fast” orders have been concentrated. Except for the production and sales of C32S, C40S, and JC21S yarns, the overall consumption in the downstream has weakened, and the yarn price has generally been adjusted to 200-500 yuan/ton.
However, the weak market situation in May has not changed, and the price of some yarn counts has been reduced by about 500 yuan/ton. Even so, cotton yarn stocks are still increasing. In comparison, business is more difficult than last year!
1. Enterprises’ ability to bear high-quality cotton spot goods has declined, and orders have continued to decline
Judging from the survey, domestic orders for carded yarn and combed yarn of 50S and above have continued to decline since May, and demand has slowed down. Textile factories in Henan, Hebei, Shandong, Jiangsu and other places have adjusted product structures and lowered cotton grades. According to the situation, the output of medium and low-count pure cotton yarn and blended yarn increased. According to the author’s understanding, small and medium-sized textile enterprises in Yancheng, Nantong, Zhangjiagang and other places in Jiangsu currently mainly spin 32S, 40S carded and combed yarns, and above 50S are produced to order. The order situation of large factories with hundreds of thousands of spindles is relatively stable. There were no particularly major changes in raw material procurement.
2. With the off-season ahead of schedule and the impact of foreign yarns, mills tried to raise prices but failed, and faced enemies from both sides
On the one hand, the domestic and foreign sales markets are gradually coming out of the peak season and entering the off-season, and orders for autumn and winter use OE yarn, C40S and below as raw materials; on the other hand, affected by the recent sharp drop in cotton yarn prices in India, some yarn mills have quoted cotton yarns above JC40S. The price is reduced by 300-500 yuan/ton, and the profit situation of cotton mills is not optimistic.
After the price of cotton yarn fell, the price of cotton rose. Although yarn mills and traders are highly willing to make up for the increase and tentatively increase their quotations, most of the actual transactions are executed with the original quotation, and only a few new orders are executed with the new quotation. Most specifications are relatively light, and the high-count category is slightly weaker than the conventional category. The trading atmosphere of pure polyester yarn has improved. The demand for T45S and 50S has slightly increased, while the trading volume of other specifications is small. The sales of rayon yarn R10S and 30S are acceptable. Affected by the weakness of viscose staple fiber, the price also fell. T65/C35 45S transactions are acceptable and prices remain stable. Polyester and viscose yarns are weak, and individual prices move down. At present, the inventory of yarn mills has increased slightly, the start-up remains at a high level, and the follow-up of new orders in the later period is not good. Conventional pure cotton yarn has been weakly adjusted, the price is slightly loose, and the pressure on manufacturers has increased due to high cotton prices. The price of C40S carded yarn is about 23,900-24,300 yuan/ton. Shandong Changyi pure polyester yarn has been partially fine-tuned. The original white quality optimized 32S is quoted at 12,500-15,000 yuan/ton for short delivery, and the pure black 32S is quoted at 12,500 yuan/ton for short delivery. The downstream follow-up is slightly lagging behind.
A medium-sized cotton company in Henan said that it has been in an embarrassing situation recently. The transaction prices of high-quality Xinjiang cotton, foreign cotton and reserved Xinjiang cotton have increased significantly. However, yarn and cloth have been unable to rise, and unit prices have fallen. Spinners have suffered from both sides; small spinners Purchasing reserved real estate cotton and 2016/17 real estate cotton yarn with count C21S and below has advantages in cost, wages, taxes, etc., and large and medium-sized enterprises are at a competitive disadvantage.
3. Profits have been reduced by 500-600 yuan/ton, and textile companies will never accept high-priced cotton
On the 23rd, a textile company in Dezhou, Shandong Province calculated an account: the current raw material cost for spinning carded 32S yarn is 16,000 yuan/ton, while the cost of water, electricity, labor and other costs is 6,800-7,000 yuan/ton. Add the two That is, the cost of carded 32S is 16,000+7,000=23,000 yuan/ton. As of the 23rd, the price of carded 32S in Hebei and Shandong areas was 23,200-23,300 yuan/ton, which continued to fall by 100 yuan/ton from last week. At present, the net profit from the production of carded yarn is currently 200-300 yuan/ton.
“At the beginning of this month, the profit was still 800-900 yuan/ton, and in a good situation it reached 1,000 yuan/ton.” The person in charge of the company said that since the beginning of this month, the market cotton price has increased by 300-500 yuan/ton. , while the cotton yarn price has accumulatedThe price dropped by about 200 yuan/ton, causing the profit of carded and medium-count yarn to be compressed by 500-600 yuan/ton.
If this situation is allowed to continue to develop, textile companies will fall into losses. “Everyone is now very resistant to high-priced cotton and will never accept high-priced cotton.” Many textile companies said.
As May comes to an end, the entire cotton spinning market is undergoing a series of changes. What the editor wants to say is that perhaps the cooling of the cotton yarn market is not only determined by the rise and fall of cotton prices, but also reflects the general decline in prices and weak transactions. the status of the entire industry chain. Under attack from both sides, where will the price of cotton yarn go? Please pay attention to the relevant reports of Junior Brother Sha (WeChat ID: ssdtex).
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