As the Spring Festival approaches, various factories are gradually entering the finishing stage, and holiday arrangements have been released one after another. It is understood that the holiday time of textile companies this year has been extended compared with last year. Looking back throughout 2021, the cotton yarn market fluctuated significantly. As of January 21, 2022, CY C32S pure cotton yarn closed at 28,500 yuan/ton, which was the same as last week.
In terms of cotton yarn, this year’s Spring Festival holiday arrangements for various textile companies have been released one after another. According to statistics, this year’s holiday time is more scattered than last year. In 2021, only 4% of textile companies will have a holiday before the 20th of the twelfth lunar month during the Spring Festival. In 2022, this proportion increased to twenty three%. In comparison, the Spring Festival holiday in 2020 is significantly earlier than in 2021. In 2022, 22% of companies plan to start construction after the tenth day of the Lunar New Year, compared with only 13% last year. Most factories open on the sixth or seventh day of the lunar month. Delays in starting construction are also evident. In comparison, 60% of textile companies will have holidays within 10 days in 2021, and this number will decrease to 29% in 2022. The proportion of vacations lasting more than 15 days increased significantly to 32%, compared with only 13% last year. Most textile companies have holidays of 10-15 days. Overall, the number of vacation days has been significantly longer than last year. The reason is mainly due to the substantial loss of cotton yarn profits of textile companies. In addition, textile companies have already arranged orders in 2021 before the year, and the inventory of textile companies this year is relatively high. As of the 21st, the inventory of pure cotton yarn of textile companies was reported to be 26.3 days, an increase of 1.6 days from last week. From the perspective of profits, from January to September 2021, textile companies all had good profits, but after October profits shrank rapidly to substantial losses. At present, the current profit loss of textile company C32S cotton yarn has reached nearly 2,000 yuan/ tons, which is nearly a thousand yuan more than the highest point of loss in September 2020. Such losses are also huge from a historical perspective. However, under the huge losses in 2020, the factory inventory dropped to what extent, I believe the market still remembers it. There are many new ones with less than half the operating rate, so it is expected that textile companies will take holidays early and extend their holidays. At present, cotton prices continue to rise, and the market is currently bullish about the cotton yarn market after the year. It is still relatively difficult for textile companies to turn losses into profits. Therefore, even if the market is generally bullish about the year after the year, textile companies still choose to reduce production to reduce costs. Loss.
In terms of imported yarn, after several months of slow destocking and the phenomenon of some traders dumping goods at low prices in order to withdraw funds at the end of December, the overall spot inventory of traders in early 2022 is at a low position; it coincides with this time of Indian cotton The sharp rise has driven up the price of Indian cotton yarn. The external quotation of Indian yarn has reached a desperate level. At the same time, Yue yarn, Indonesian yarn, and Wu yarn have also risen to varying degrees, which has further aggravated traders’ reluctance to sell. Current positions Traders with lower prices may close the market and not offer external quotations, or may increase their quotations. As of January 21, the internal quotations of India C32S, Pakistan C20S, Vietnam C32S, and Uzbekistan C32S were 28,300, 26,000, 28,360, and 28,300 yuan/ton respectively, which increased again compared with a week ago. The downstream weaving mills have basically implemented the strategy of replenishing stocks based on the immediate demand for orders. Overall, the inventory of yarn raw materials is not large. However, as of today, the start-up load of the main imported yarn downstream weaving mills has generally dropped significantly, and most weaving mills have begun to take holidays. The market is currently very bullish after the Spring Festival. However, whether there will be a real bull market in the imported cotton yarn market after the Spring Festival requires further observation of the downstream order status and the destocking of finished goods inventories by textile companies. At the same time, it is necessary to pay attention to whether the Federal Reserve will raise interest rates to curb inflation. It will drive bulk commodities into a bear market, thereby affecting domestic cotton yarn prices, and whether this wave of replenishment will curb the downstream demand for pure cotton yarn in the short term after the Spring Festival.
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