There is still more than a month left before the Spring Festival, and many dyeing factories have already issued notices of early holidays. At the same time, the weak market conditions and large inventory backlog have also forced many spinning companies to plan to take holidays in advance, hoping for the market after the year. What is the current operating status of spinning enterprises and clusters in various places? Is taking an early vacation a relief for him?
Cotton yarn quotation reduced
But still difficult to ship
“Now it’s not a question of the price of cotton yarn, but that the sales of cotton yarn are really not smooth.” When talking about the market situation, a person in charge of a cotton spinning mill said helplessly.
Since November, cotton yarn prices have gradually fallen due to declining downstream demand. Currently, the weak market conditions have made spinning companies feel helpless.
According to feedback from cotton spinning mills and traders in Jiangsu, Zhejiang, Henan, Shandong and other places, the transaction price of combed yarn of 60s and above has dropped significantly in the past week or so, with some manufacturers adjusting by more than 500 yuan/ton. At present, the inquiry and shipment of C40s and below ring spinning yarn and OE yarn have not improved much. The overall transaction is relatively cold, and the yarn price has also mainly declined slightly.
The person in charge of a small cotton spinning mill in Wangjiang, Anhui Province said that although the company’s 40-count carded ring-spun pure cotton yarn was quoted at about 30,500 yuan/ton, which was 500 yuan/ton lower than before, the cotton yarn transaction was deserted due to weak downstream demand. At present, the company’s cotton yarn inventory exists for more than one month, which is about one month higher than at the beginning of the month. It is also understood that the price of 21s and 26s polyester-cotton yarn at a factory in Chizhou, Anhui Province has dropped by about 400 yuan/ton in a month, and the cotton yarn inventory has increased by 38%. The quotations of cotton yarn from spinning mills in Liaocheng, Shandong have mostly been reduced by 200 yuan/ton to 500 yuan/ton, but it is still difficult to ship.
A medium-sized textile company in Henan said that as the end of the year approaches, on the one hand, weaving and clothing factories are troubled by multiple factors such as insufficient orders, tight funds, and concerns about the spread of the new crown epidemic. Cotton yarn is basically bought as needed; on the other hand, Guangdong, Jiangsu Traders in the light textile market in , Zhejiang and other places are less willing to stock up before the Spring Festival, and most of them currently operate with withdrawn funds. In addition, the comprehensive upgrade of epidemic prevention and control in various regions has not only affected the production and order-taking of labor-intensive enterprises such as weaving, printing and dyeing, and clothing, but also affected the transportation of cotton yarn, gray cloth, and fabrics.
The survey shows that since early December, cotton textile mills have begun destocking operations one after another, providing sincere bargaining space. Some companies with large cotton yarn inventories have reduced sales by 300 yuan/ton to 500 yuan/ton. As for the reason why cotton spinning mills continue to cut prices and even rush to ship goods at the expense of production and sales, industry analysis is not only that cotton yarn stocks have generally increased to 20 to 30 days, but also related to the recent concentrated dive in cotton yarn quotations in India, Vietnam, Pakistan, and Central Asia.
Market is light
Enterprises place their hopes on the next year
According to reports from spinning clusters in various places, companies are focusing on destocking near the end of the year. The light production and sales situation makes companies look forward to the market situation after the Spring Festival.
An enterprise specializing in differentiated yarn in Shandong said that the enterprise is currently operating at full capacity, with most products being custom-made and a small part being ordinary products, and product prices will be adjusted according to market conditions. Due to insufficient domestic demand and the increase in companies producing differentiated products, market competition pressure has increased. Companies are not optimistic about the future market.
“Downstream demand is still sluggish, and small batches are purchased on demand. Due to market price fluctuations, orders are also unstable.” A pure cotton yarn production company in Henan said that the recent pure cotton yarn production has been basically stable, but there are few transactions, and cotton yarn prices have been weakly declining. , textile companies still focus on destocking. It is expected that the current situation of light production and sales will continue until around the Spring Festival, and corporate inventories are high. We are looking forward to the market situation after the Spring Festival.
Enterprises mainly engaged in dyed yarn in Jiangsu said that the overall operation of the dyed yarn market has been stable recently, with an operating rate of more than 90%. Currently, orders are in the transition period between spring, summer and autumn and winter orders. There are insufficient inquiries and the trading atmosphere is still low. But overall, orders this year are better than last year. At present, most downstream customers are developing new versions for next autumn and winter, and orders are expected to increase around the Spring Festival.
In the Fujian non-cotton yarn market, prices have dropped significantly, among which the price of viscose staple fiber raw materials has dropped significantly. The order situation has not yet recovered, and the market vitality is poor.
According to denim cluster enterprises, the current production operation is basically normal. The price of denim yarn has been reduced recently, the price of indigo dye is still running at a high level, and the actual transaction volume of downstream customers is insufficient. At present, enterprises are mainly destocking, and production and sales are basically smooth. Companies place their hopes on the market after the year.
It is understood that in addition to paying attention to the downstream demand of the market, the important focus of spinning enterprises is still the direction of the epidemic. Many cotton spinning mills said that as the new year is approaching, the risk of the epidemic continues. Affected by the Omicron mutant strain, the market has insufficient confidence in the market outlook, and downstream companies have insufficient motivation to place orders, and they will still face challenges in the future. If the market continues to be sluggish, companies do not rule out the possibility of early holidays and hope that the market will improve after the year.
Early holiday
The advantages may outweigh the disadvantages
Regarding the early holiday for textile companies this year, industry experts believe that it was definitely a bad thing in previous years. Because the year before last is the production season for spring and summer orders in the textile market, many spring and summer clothing will basically be on the market after the year. The Spring Festival holiday, the factory shutdown time for a long time, every day before the year is extremely valuable. If the holiday is carried out significantly in advance, it will be very difficult for textile companies that are eager to wait for shipments.�It would be a disaster. But this year’s market is on holiday ahead of schedule, which may be a relief for many textile workers.
Experts explained that first of all, the market was still quiet a year ago, and the number of relevant orders received by various textile companies was far less than in previous years. Most companies were making orders for next year’s autumn and winter. It can be said that the recent spring and summer clothing orders in the textile market were absent. Because the clothing sales side still has a large amount of spring and summer clothing in stock due to the impact of the epidemic at the beginning of the year. The spring and summer market next year is basically a function of digesting inventory, so there is no need to place this order again and increase inventory.
The second is to reduce production costs. For the vast majority of textile companies, even if there are no orders, they will not easily stop production and take holidays. Once a long holiday is taken, it is easy to cause the loss of workers, and it will be more difficult to resume production. Work cannot be stopped without orders, and the expenditures on labor, water, electricity, and environmental protection will greatly increase the company’s operating costs. However, an early holiday will give textile companies a reasonable reason to stop work, which can not only reduce expenses and inventory, but also avoid avoiding Loss of workers.
The last step is to ease the order dilemma. Experts said that there are now many textile companies in the market that have received foreign trade orders, but receiving orders now is not necessarily a good thing for them. Due to the appreciation of the RMB, the shortage of shipping containers, and the increase in freight prices, most companies have experienced sharp reductions in profits or even losses. By taking the holiday in advance, the delivery date can be appropriately delayed, leaving room for the exchange rate to fall, and at the same time giving the containers some time to return to the country.
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