At the beginning of the new year, as cotton raw materials rose, cotton yarn also experienced a wave of rise after New Year’s Day. As of January 7, 2022, CY C32S pure cotton yarn closed at 28,200 yuan/ton, an increase of 120 yuan/ton from last week.
Last week, cotton was greatly affected by the rise in the external market. On January 4, US cotton once hit a new high in nearly a month and a half. Zheng cotton rose strongly by nearly 400 points on Wednesday, and then fell back from the high on Thursday and fell slightly. Zheng Cotton rose nearly 300 points during the week, an increase of 1.42%. On the spot side, cotton spot transactions increased slightly last week, and cotton raw material inventories of downstream textile companies continued to decline. As of January 7, cotton inventories of textile companies remained at about 32.6 days. As the Spring Festival holiday approaches, textile companies just need to purchase slightly more, and cotton trading volume has improved significantly compared with the previous two weeks. However, market merchants predict that with the end of inventory replenishment, market cotton orders may lack sustainability. In terms of price, as of January 7, the CC3128 cotton index closed at 22,333 yuan/ton, an increase of 226 yuan/ton from the same period last week.
In terms of cotton yarn, cotton yarn futures continued to rise last week, with only a slight decline on Thursday, rising nearly 700 points during the week, or 2.48%. In the spot market, transactions in the yarn market picked up last week, with some transactions slightly increasing. Downstream weaving and cotton yarn traders all purchased goods, mostly for rigid needs. The inventories of finished yarns in textile enterprises have declined steadily. As of the 7th, the inventory of cotton yarns in textile enterprises has been reported for about 24.4 days. The inventory pressure has been relieved, and some large-scale manufacturers have placed orders for popular varieties until around the Spring Festival. However, it is estimated that the profits of textile companies are still in deep losses, with current losses of nearly 2,000 yuan per ton. Most textile companies said that the holidays are approaching, and most of them focus on destocking and withdrawing funds. Spot cotton yarn prices have rebounded due to higher cotton prices. Most merchants have raised prices several times last week, with the overall increase ranging from 500-800 yuan/ton. However, there are still profit concessions for actual orders, and merchant profit margins have reduced. However, due to differences in raw material costs and order situations, the current price difference in the market is large, and some cotton yarn varieties even reach about 2,000 yuan/ton. Looking at the market outlook, with the reduction of domestic low-price cotton resources, the proportion of new cotton used by textile companies has gradually increased, and the further increase in cotton yarn costs will provide certain support for cotton yarn prices. In addition, the decline in finished product inventory has improved the mentality of textile companies, and they have a certain degree of willingness to raise prices.
In terms of imported yarn, affected by the rebound of US cotton on the 4th, the forward quotations of cotton yarn from my country’s major cotton yarn importing countries have also increased to varying degrees. As of January 7, the internal quotations of India’s C32S, Pakistan’s C20S, Vietnam’s C32S, and Uzbekistan’s C32S were 27820, 24950, 28100, and 28010 yuan/ton respectively, which mostly increased by 50 to 200 yuan compared with a week ago. Since traders currently have little overall spot inventory, they are reluctant to sell. After the price increase, shipments have slowed down, and transactions have been average. The port inventory of imported yarn is 10.6 days, which is at the average level of previous years; the downstream load of imported yarn is 44.6%, which is little changed from last week.
As for weaving mills, since the middle of last year, the cotton yarn inventory level of weaving mills has actually been at an absolutely low level. The downstream industry experienced a long period of wait-and-see after the sharp drop in cotton prices at the end of November. However, near the end of the year, due to insufficient orders, , many textile companies have plans to take holidays in advance, so under low inventory, weaving mills will inevitably purchase a certain amount of cotton yarn for use in the new year. In the second half of December, Zheng Cotton stopped falling and rebounded, which also gave downstream a little confidence, so There has been a wave of relatively concentrated purchases. In fact, stocking up at the end of the year occurs every year. According to market reaction, the stocking volume this year is not as good as in previous years. In addition, some traders with low inventories still have certain expectations for the market situation after the year and have replenished their inventories. As a result, as of January 7, the cotton yarn inventory in weaving mills rebounded, closing at 11.5 days; the inventory of cotton gray fabrics closed at 31 days, and the domestic gray fabric load remained near 50%. At present, some weaving mills have started to take holidays. Most of the weaving mills have reported that they will have a holiday around January 10-20, which is from one week to 20 days earlier than last year. The overall load of weaving mills has been reduced; the overall inventory of gray fabrics has remained stable. In a high position. The specific startup rate is 42% of the weaving mills in Gaoyang, Hebei, 46% of the weaving mills in Weifang, Shandong, 49% of the weaving mills in Nantong, Jiangsu, 70% of the weaving mills in Lanxi, Zhejiang, and 70% of the weaving mills in Zhangcha, Guangdong. 38%. From a price point of view, the price of gray fabrics has not increased with the increase in upstream cotton and cotton yarn prices, and there are even some sales. The focus of transactions is downward. It can be seen that the price transmission from top to bottom is very uneven.
Looking at the future of the year, there is still a lot of uncertainty, mainly whether orders can improve. Most of the current market industry chains are in a state of low raw material inventory and high finished product inventory. If orders increase, the market will carry out centralized procurement to match the trend of cotton being difficult to fall. , then the price of cotton yarn is more likely to rise. But if the downstream orderIf cotton yarn cannot be increased effectively, it will be difficult for cotton yarn prices to rise under the current high inventory of cotton yarn. Even if cotton prices rise, it will be difficult for cotton yarn to rise more than cotton. However, given the huge losses of textile companies, if cotton prices do not fall significantly, yarn prices will not rise significantly. It is also difficult to test the price any further, and textile companies may respond by reducing production or switching production. This phenomenon has gradually increased. Generally speaking, it is expected that the price of cotton yarn will be easy to rise but difficult to fall in the short term after the year. In addition, the market has recently paid more attention to the issue of China’s cotton yarn exports, because of the high external cotton yarn prices, but the short-term benefits are limited. On the one hand, China’s cotton yarn export volume is not large, and it is currently only above 10,000 tons/month. On the other hand, there are Xinjiang cotton restriction issues.
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