According to a survey of some small and medium-sized cotton spinning enterprises in Jiangsu, Shandong, Henan and other places, since late July, the phenomenon of cotton yarn accumulation has significantly slowed down, and some cotton mills’ carded yarn stocks have peaked and declined (16S-C40S). , the phenomenon of cotton yarn occupying corporate cash flow is better than that in May/June.
An 80,000-spindle yarn factory in Jiangsu said that firstly, the situation of receiving new orders in June and July was poor, and the production and sales of cotton yarn were not free from the inversion and the impact of high temperature weather. Most cotton spinning mills adopted measures to reduce and limit production, and employees took turns to take breaks and work rotations. Or take a short holiday, try not to add new cotton yarn to the inventory; secondly, for high-count carded/combed yarns of 50S and above, it is required to order spinning or not accept short orders or small orders; thirdly, increase the number of OE yarns and ring spinning The destocking efforts of spinning and carding yarns have not only expanded the bargaining space for old customers and large orders, but also allowed delivery of goods in installments and batches, and payment methods such as 1-3 month account period, acceptance and even partial credit. The destocking effect of carded yarn with counts of 40S and below is evident.
Regarding the current trend of domestic cotton futures in August, cotton companies in Shandong and Henan are not optimistic. It is judged that the Zheng cotton CF2209 contract may break through the 14,500 yuan, 14,000 yuan and other levels in the short term. Whether it can test and open the previous low of 13,560 yuan deserves attention. , the reasons can be simply summarized as follows:
First of all, in June/July, new export/domestic sales orders received by cotton textile, fabric, clothing, and foreign trade companies continued to be weak. In August/September, the phenomenon of production reduction and suspension of yarn mills is not only difficult to alleviate, but also has a tendency to worsen; secondly, due to the impact on 2022 The market price of new cotton in 2023 is expected to be low (13,000-14,000 yuan/ton is the mainstream) and credit support from financial institutions has weakened recently. Cotton spinning mills will expand in August/September and their enthusiasm for effective replenishment will be low. Centralized raw material procurement may be postponed to New cotton is on the market; again, not only is the impact of the comprehensive escalation of the U.S. and EU’s ban on Xinjiang cotton imports increasingly prominent, but also the partial cancellation of additional tariffs on U.S. imports from China has no progress. For Chinese cotton textile and cotton garment enterprises , the export pressure will only increase in the second half of the year.
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