It is understood that from November to December 2016, the production and sales situation of textile enterprises improved significantly compared with the previous months, yarn prices increased, and cotton-using enterprises and traders actively stocked up and replenished raw material inventories. There is still more than a month left before the Spring Festival, but the spinning, gray fabric and clothing markets seem to be ushering in a round of “Little Indian Spring”. However, there are some discrepancies in the actual situation, at least not as optimistic as expected by upstream raw material manufacturers. Spinners have implemented “destocking” in advance and cotton yarn quotations have been raised by 500-1,000 yuan/ton. This is more of a passive and helpless move, which has a negative impact on the entire downstream cotton industry. In terms of consumption, order taking and export, there is little hope of trying to push the prices of downstream gray fabrics, fabrics, clothing, etc. through the upstream to follow suit.
1. Is the profit situation of cotton mills getting better? Since late November, the price of cotton yarn for carded and combed yarn has increased by 500-1,000 yuan/ton, but it is difficult for yarn mills to make profits. Judging from the survey, from October to mid-November, the raw material supply of most cotton textile mills in the mainland was mainly reserve cotton, supplemented by a small amount of imported cotton and 2016/17 Xinjiang cotton. Cotton prices were concentrated at 14,500-15,500 yuan. /Ton. As we all know, cotton mills generally receive orders at least 30 to 45 days in advance. Therefore, the cotton prices referenced by weaving factories, garment factories, and trading companies when placing orders are the cotton prices in September and October. However, after October, domestic cotton prices have “oscillated” “Rebound”, so the more cotton is used in cotton mills, the more expensive it becomes. If the price does not increase, the problem may not be solved. In addition, the real handover period for new cotton and old cotton is around mid-October. The quotation price of Xinjiang cotton in the “Double 28” inland warehouse in 2016/17 is always above 16,000 yuan/ton, and the price difference with the reserve cotton reaches 500-1,000 yuan/ton. tons, the only way for cotton textile mills to produce and fulfill orders is to “increase prices”. The growth rate of cotton is the same as or even higher than that of yarn. How can yarn mills start talking about profits?
Cotton yarn production and sales are booming in February, November and December? First of all, considering that the price difference between new cotton and old cotton is relatively large in November, large and medium-sized cotton textile mills purchase raw materials “as they are used” and produce according to orders, so yarn inventories remain at a low level; while small spinning mills After depleting the low-priced cotton reserves, production was quickly reduced and stopped. Some yarn mills with orders mainly purchased real estate cotton and reserve cotton from traders; secondly, considering the high price of new cotton, they were worried about yarn mills raising prices. Downstream weaving mills and middlemen are urging cotton spinning mills to deliver goods in accordance with the contract or even in advance; thirdly, some trading companies rush to complete the orders before the Spring Festival in order to collect the payment. In addition, as the Spring Festival approaches, cotton textile mills increase their efforts to “destock” and dump goods from time to time. It is not true demand that triggers market recovery;
3. Downstream products such as cotton yarn have great resistance to price increases. First, the national environmental protection department has stepped up efforts to control pollution. Dyeing factories in Jiangsu, Zhejiang, Fujian, Shandong, and Hebei have successively suspended production and reduced production. Coupled with the increase in dye fees in November and December, the gray fabrics of some varieties and manufacturers have increased. Above 1 yuan/meter, weaving factories and trading companies are having a hard time, and cloth factories can only exert reverse pressure on yarn prices; secondly, the depreciation of the RMB is good for textile and clothing exports, but developed countries such as Europe, the United States, and Japan, as well as Brazil, There are more and more anti-dumping investigations against my country in developing countries such as Argentina and India, and it is not easy to receive foreign trade orders; thirdly, cotton yarns from India, Pakistan, Vietnam, Indonesia and other places are crazy. At present, the price difference between domestic and foreign cotton yarns is 700-1,000 yuan/ton. Especially as domestic cotton prices in India have fallen, the prices of imported yarns and domestic yarns have tended to increase. The pricing power of cotton yarns with counts of C32S and below has been lost.
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