According to feedback from textile enterprises in Henan, Shandong, Jiangsu and other places, power restriction measures have been relaxed since the end of October, and enterprise production capacity has gradually recovered. At present, the operating rate of small and medium-sized yarn mills has risen to about 80%, and the operating rate of weaving enterprises in Shengze has rebounded to 78%.
After the resumption of production restrictions, some gray fabrics in Jiangsu and Zhejiang are still in tight supply, and cotton yarn companies are trying to survive in the cracks!
The recovery of production capacity has relatively eased the burden on the weaving market. It is understood that many specifications of gray fabrics are no longer in stock on the market. To get the goods, you need to wait for the machine to come down and make a reservation in advance. Nisi spinning is the most obvious example. In the past, the supply of gray fabrics was tight, leading to price hikes. Now that the supply has eased, prices have fallen quickly, the market has reacted quickly, and the market trend has been very obvious.
Manager Hu of Shengze, which specializes in four-sided elastics, said: “The factory has not received any further notice of production suspension, and the machines are fully operational. Many gray fabrics are out of stock. Now we are working hard to catch up on orders.” Mr. Cheng, who owns 800 looms, revealed that the factory has not limited production, and all the machines are producing nylon yarn, but there is still no inventory. The day’s output has been booked in advance by customers, so Very nervous.
A 30,000-spindle yarn factory in Dezhou, Shandong said that some textile companies above designated size have a high proportion of medium and long-term orders, and their main products are C40S and above medium and high-count yarns (the profits of high-count yarns are significantly better than those of low-count yarns) Spindle spinning, open-end spinning), coupled with order support for new fibers, differentiated fiber yarns, etc., it has stronger risk resistance and bargaining power than small factories. Small and medium-sized cotton enterprises are struggling to survive amid the continued rise in commodities and insufficient effective orders.
Polyester gray fabric inventory is declining, and cotton yarn finished products are difficult to improve
Under the circumstances of production restrictions and gray fabric shipment preferences, gray fabric inventory continues to decline decline. The power shortage continued in the previous week, coupled with the atmosphere of surge in commodity prices, domestic demand rebounded, and gray fabric inventories continued to be significantly reduced. Although production capacity has been increased, gray fabrics are being shipped one after another, so polyester inventory is still declining slightly. The two most popular types of gray fabrics in Jiangsu and Zhejiang this year are nylon and four-way elastic. Weaving manufacturers that mainly produce these two types of gray fabrics must have low or even zero inventory. After about one month of consumption, other manufacturers have also significantly destocked their warehouses. According to data monitoring, the current inventory of water spray and air jet manufacturers in Shengze area is 28.3 days old.
However, from the perspective of the cotton yarn market, the sales of finished products have not improved. Except for C50S and above high-count carded and combed yarn orders, the orders are surprisingly poor, and the orders for C40S and below are all Cotton yarn and polyester-cotton yarn are still slightly accumulated.
The resurgence of the epidemic and the tightening of credit are concerns about the difficulty in transmitting textile prices downstream!
However, most industry insiders believe that although the current order reception situation is still good, this wave of orders is mainly affected by Double Eleven. In the later period, as power rationing was relaxed, domestic demand weakened during Double Eleven, and early orders were gradually sold out, leaving the gray fabric market with the risk of accumulating inventory again. Regarding the difficulties currently encountered by textile companies, the industry can briefly summarize the following points:
First, raw materials have risen sharply since late September, and the rise in cotton yarn, gray cloth, fabrics, etc. cannot be followed up simultaneously, making it difficult to transmit prices to downstream;
Second, since July, countries such as India, Pakistan and Vietnam have started their economies, and the spinning, weaving, clothing and other industries have recovered rapidly. A large number of orders from Europe, the United States, the Middle East and other countries have flowed out of China. Not only has the volume of low-end orders declined, but high-value-added orders have also has also decreased;
Third, since mid-October, the domestic new crown epidemic has made a comeback, and as of November 3, it has affected 19 provinces. Many places have stepped up epidemic prevention and control efforts to block the spread of the epidemic, and have imposed restrictions on cotton textile companies receiving orders and The impact of production, transportation, etc. is becoming more and more prominent;
Fourthly, since October, the central bank has continued to increase reverse repurchase operations to ensure reasonable and sufficient liquidity. The expectation of an interest rate cut in November has gradually faded away. Textile and garment enterprises are optimistic about 2021. Concerns about credit tightening rose in the fourth quarter.
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