As of 24:00 on December 4, 2.8867 million tons of cotton had been inspected by public inspections nationwide, of which 2.8349 million tons were inspected by Xinjiang and 51,700 tons were inspected by mainland police. From the above published data, it can be seen that the mainland’s cotton public inspection data lags far behind that of Xinjiang. In addition to the decline in planting area and production, it is also related to the reluctance of cotton farmers to sell. However, as factors such as weather, prices, and cotton have gradually stabilized recently, seed cotton purchasing activities in the mainland have become active again.
Should cotton be “sold” or “kept”?
Recently, as factors such as weather, prices, and cotton prices have gradually stabilized, seed cotton purchasing activities in the mainland have become active again. Taking into account that cotton reserves will start to be rotated out in March next year, cotton companies will speed up the sale of lint cotton in order to reduce operating risks. Cotton companies have adopted the same measures of “fast harvest, fast rolling, and fast sales” as in previous years to reduce lint cotton stocks as much as possible.
According to the survey, there are still many cotton companies that are “tangled” in lint sales. Although they don’t have much profit, they are not going to suffer losses. This is the reason why cotton processing companies and merchants in Xinjiang are hesitant and hesitant about whether to sell or keep cotton.
In fact, compared with the plummeting domestic cotton and cotton spot markets from September 2015 to April 2016, life for ginners and cotton-related enterprises is much better this year.
Since late November, the Zheng cotton CF1705 contract has oscillated in a wide range of 15,600-16,500 yuan/ton, and the center of gravity has continued to shift downward; although the replenishment efforts of cotton textile mills and traders in and outside Xinjiang are lower than expected, they have supported the high cotton spot price; Coupled with the support of practical factors such as the “inefficient” transportation of Xinjiang cotton out of Xinjiang from October to December and the fact that real estate cotton has become a “supporting role”, some cotton processing companies and operators in Xinjiang are currently stuck in whether to save cotton to wait for an increase or to lose the cotton. Among An’s troubles.
The view of many people in the industry is to “sell more and save less” and try to reduce operating risks in the first half of 2017. Among them, “Double 29” and “Double 30” hand-picked and machine-picked cotton can be considered to be postponed, but 3128, It is better to put lint in the bag for 2128 and lower grades. You can consider it from the following perspectives:
First, how much can cotton spot prices rise in 2017? Judging from the sales time, domestic cotton demand and consumption basically stagnated from the Spring Festival in mid-January to mid-February 2017. The state-owned cotton rotation began on March 6. Therefore, if the shipment and sales to Xinjiang are not concentrated before mid-January, For cotton, you can only wait until March or April to have the opportunity;
Second, external cotton pressure. It is estimated that as of the end of December 2016, more than 200,000 tons of cotton import quotas in 2016 will be extended until the end of February 2017. Coupled with the 2017 1% tariff quota of 894,000 tons, the quota will be relatively sufficient at least until July 2017. ; In addition, the current cost of Australian cotton under 1% customs clearance for the April-June 2017 shipping schedule is about 14,800-15,000 yuan/ton, which is very competitive compared with Xinjiang cotton;
Third, the cotton reserves are not unusable. Judging from the transactions and feedback from textile mills from May to September 2016, the quality and spinnability of reserve cotton are still very good. Some large factories even retain cotton import quotas and only purchase reserve cotton and Xinjiang cotton with cotton spinning. . Considering that the reserve cotton wheel output in 2017 is sufficient, although the amount to meet the demand for combed yarn, high-quality cotton, and high-count yarn cannot be determined, the replenishment effect on the supply is outstanding;
Fourth, the financial pressure on cotton companies. A large number of cotton ginning factories in Xinjiang used loans from the Agricultural Development Bank of China, credit cooperatives and other commercial banks. They had to repay the loans on a monthly basis and in proportion. Finally, they achieved “double settlement and zero payment” at the end of August 2017. It can be said that the financial pressure follows them everywhere. , whether cotton can survive is questionable. In addition, compared with cotton companies that are self-owned, financed, or jointly acquired, it is not easy to occupy the acquisition funds for nearly 10 months;
Fifth, the pressure on downstream products such as cotton yarn and gray cloth has increased. At present, the price difference between Indian and Pakistani yarns and domestic yarns at the port has reached 800-1,200 yuan/ton. The influx of imported yarns into the domestic market is overwhelming. Small and medium-sized cotton spinning mills that produce low-count yarns of C32S and below have responded by reducing production and suspending production; India The delay in the launch of cotton, the postponement of exports, and the elimination of hidden dangers in domestic monetary policy, Indian cotton acquisition, processing and export are on the right track, and the competitiveness of Indian yarn is “only strong but not weak”; coupled with the sharp fluctuations in the RMB exchange rate, the export situation is becoming increasingly complex. How do cotton yarn and gray fabrics respond to rising cotton prices?
Yarn prices are rising, and pure cotton companies are under great pressure!
Recently, the price of cotton yarn in the Hebei, Shandong and Henan regions has continued to rise. However, due to pressures such as costs and funds, there is an increasing trend of textile companies suspending work and limiting production in December.
On the 6th, the prices of C21S, 32S, and 40S from a factory in Shandong were 20,100 yuan/ton, 22,300 yuan/ton, and 23,600 yuan/ton respectively, which were all 100-200 yuan/ton higher than yesterday. According to feedback from enterprises, the recent sales of conventional pure cotton yarn are acceptable, and enterprises would rather reduce theThe operating rate also maintains a low inventory operation mode, and the company’s finished product inventory is 9-10 days.
At present, the cost of cotton yarn is still 500-800 yuan/ton. In order to reduce losses, companies must either lower raw materials or increase cotton yarn prices. Although cotton prices in Zhengzhou have fluctuated violently recently, cotton spot prices are as stable as a rock, and textile companies have no choice but to raise cotton yarn prices. As of the 6th, the cotton price in the Hebei-Shandong region, Xinjiang’s “Double 29” hand-picked cotton price was 16,400 yuan/ton, and the price of machine-picked cotton 3128 grade was 16,000 yuan/ton.
In addition to pure cotton yarn, the prices of pure polyester yarn and polyester-cotton yarn have also risen. As of the 6th, the prices of T65/C3521S, 32S, and 45S at a factory in Hebei were 14,000 yuan/ton, 15,300 yuan/ton, and 17,900 yuan/ton respectively, which were all 100-150 yuan/ton higher than last Friday (2nd).
According to analysis, there are two reasons for the increase in blended yarn prices: First, the price of polyester staple fiber has rebounded recently. As of the 6th, the price of 1.4D direct-spun polyester staple fiber in Hebei, Shandong, Jiangsu and Zhejiang was 7550-7750 yuan/ton, an increase of 50-100 yuan/ton from last Friday (2nd). The market believes that the recent stability of the polyester market is beneficial to the spot polyester staple fiber, and the recent price focus may continue to rise. Second, the sales of polyester-cotton yarn were good, and companies took the opportunity to raise prices.
According to market feedback, companies that produce polyester-cotton yarn and pure polyester yarn have relatively low raw material prices and relatively high profits. They can say that they have no worries about production and sales. Pure cotton yarn companies are under heavy pressure.
First, raw materials are scarce. Recently, textile companies have been reporting that due to the difficulty of exporting cotton from Xinjiang, many have signed purchase and sales contracts and paid for the goods, but the cotton cannot leave Xinjiang because the carriages cannot be coordinated.
Secondly, almost all cotton companies and middlemen require cash payment, otherwise no transaction will be concluded regardless of whether the price is high or low. “This is a big test for textile companies’ ability to pay for their goods.” A market source said that because of their inability to pay for goods, many companies had to continue to lower their operating rates. Especially as the end of the year approaches, companies are spending more and more money, and their financial pressure is increasing day by day.
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