Recently, the domestic epidemic has spread in many places, and various regions have stepped up prevention and control measures and insisted on “dynamic clearing”, which has had a certain impact on the production, transportation, and sales of some cotton spinning enterprises and the operations of some traders in the light textile market. Following the suspension of the Dongguan Dalang Wool Trading Center and Hangzhou Sijiqing Clothing Street, Huzhou Zhili Children’s Clothing City and Zhili International Textile City also issued announcements on March 8 to close their markets indefinitely. Some small and medium-sized cotton spinning enterprises in Henan, Shandong, Hebei and other places have reported that with the escalation of epidemic prevention and control, not only cotton procurement and transportation have been affected to a certain extent, but also inquiries and purchases by weaving enterprises and cotton yarn traders in coastal areas of Guangdong, Jiangsu, Zhejiang, Shandong and other places , shipments have also slowed down compared to mid-to-late February. Under the premise that cotton yarn inventory has gradually increased and working capital has tightened, expectations for phased production reduction and suspension have increased.
Judging from the survey, in early March, the procurement of cotton and other raw materials by domestic cotton spinning companies has not shown much improvement, and the inventory replenishment period has been postponed again. Compared with the steady and slight decline in industrial inventories of large and medium-sized cotton-consuming enterprises, small yarn mills, small Weaving companies adhere to the principle of purchasing according to orders and buying as they are used, and try to reduce the inventory of cotton yarn to the lowest level to avoid risks.
From March 9th to 10th, the quoted price of “Double 28” (or Single 29) machine-picked cotton in the supervision warehouse in Xinjiang was concentrated at 22,650-22,750 yuan/ton, and the quoted price of “Double 29” machine-picked cotton was 22,780-22,900 yuan/ton. tons, the quotation is relatively stable and does not fluctuate violently with the wide adjustment of Zheng Cotton’s main CF2205 contract.
A medium-sized cotton processing company in Xinjiang said that the recent recurrence of the domestic epidemic, the United States’ consideration of adjusting its trade policy towards China, and the conflict between Russia and Ukraine have not only increased freight costs for cotton textile and apparel exports, but also made it difficult to receive orders and the continued rise in bulk commodities have pushed up the production cost of cotton textiles. , concerns among cotton companies continue to rise, and expectations for a rebound in cotton prices in 2021/22 have been significantly reduced. In addition, some companies reported that credit collection efforts by financial institutions have recently increased, and the cash flow of cotton processing companies has become tight.
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