According to feedback from cotton spinning mills and traders in Jiangsu, Zhejiang, Henan, Shandong and other places, the transaction price of 60S and above combed yarn 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-spun and OE yarns have not improved much. The overall transaction is relatively cold, and the yarn price has mainly declined slightly.
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and other places are less willing to stock up before the Spring Festival, and most of them currently operate with withdrawn funds.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.
Judging from the survey, since early December, cotton textile mills have begun to go to the warehouse to collect money, providing sincere bargaining space. Some companies with large cotton yarn inventories have reduced their sales by 300-500 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 not only has the cotton yarn inventory generally increased to 20-30 days, it is also related to the recent concentrated dive in cotton yarn quotations in India, Vietnam, Pakistan, and Central Asia.
At present, cotton yarn quotations vary greatly and are relatively chaotic. The price difference of the same high-end C40S in Guangdong, Jiangsu, and Zhejiang reaches about 500 yuan/ton. Some cotton yarn traders judge that due to the impact of the epidemic, weak terminal orders, skyrocketing sea freight on various routes in Southeast Asia, and tight cash flow at the end of the year, downstream markets such as cotton yarn and gray fabrics will still have weak support for the rebound of cotton futures before the Spring Festival.
According to a downstream textile company, the current efficiency of carded yarn is not ideal. First, there are few orders, which will basically last until the end of December, and there are insufficient follow-up orders. Second, spinning profits are low. With the support of cotton reserves in the early stage, the company still has a small profit. If all new cotton is used for textiles, the loss per ton of cotton yarn will be more than 1,000 yuan/ton; third, the downstream fabric factories have large inventories and are currently in the process of destocking, so there is insufficient motivation to purchase cotton yarn in the short term. There is another situation worthy of attention. Nowadays, companies are very cautious in purchasing. As the end of the year approaches, companies are under great pressure to collect payments. Without sufficient cash, it is difficult to prepare large quantities of inventory. Therefore, the textile industry is still very deserted in the short term.
A textile company in Henan also said that its company mainly does processing, and orders are scheduled until the end of the year. The profit per ton of yarn is more than 1,000 yuan/ton. The current price of new cotton is 22,000 yuan/ton. Even if it purchases new cotton yarn, there is still a certain profit. Although the overall industry is sluggish, the production and sales of enterprises are stable. At present, the orders and profits of combed yarn are poor, obviously not as good as semi-precision yarn or compact spinning yarn. The business person said that the 80/20 rule exists in every industry. Even if the industry is in a downturn and most companies are not doing well, there will be some companies that do well in operations. Generally speaking, the cotton spinning industry is not as pessimistic as everyone imagines, and it is normal to encounter problems at present. After all, the entire industry has experienced a round of rapid development since last year, and some companies will feel uncomfortable if the development speed slows down.
The epidemic in Zhejiang has not stopped, but the epidemic has started again in Dongguan
The epidemic in Zhejiang has not stopped, but the local epidemic is in Dongguan, Guangdong. On the 14th, Dongguan City held a press conference on the prevention and control of the new coronavirus epidemic, reporting the situation of two asymptomatic infections of new coronavirus pneumonia found in Dalang Town. According to the official WeChat account of Healthy Guangdong, from 0 to 24:00 on December 15, there were 6 new locally confirmed cases in Guangdong, all of which were reported in Dongguan. Among them, 3 cases were discovered through close contact investigation, 2 cases were asymptomatic infections and 1 case was confirmed. Found in nucleic acid screening of key populations. Overnight, the circle of friends in the Dalang wool textile industry was flooded with emergency notifications.
It is reported that Dalang Town in Dongguan is known as the “Global Woolen Textile Center”. Currently, there is a huge woolen industry cluster centered on Dalang and covering surrounding areas. It has nearly 10,000 woolen industry enterprises and has formed R&D, design, production and processing, It provides one-stop industrial support such as logistics trade, scientific and technological services, and information consulting. The entire industrial cluster market has annual sales of more than 1.2 billion pieces.
At this time in previous years, although it was in the final stage of the year, a batch of orders would often be placed before the Spring Festival holiday, and the dyeing factories were still very busy, with the operating rate generally above 80%.
According to statistics from the China Silk City Network, as of December 10, the weaving, printing and dyeing operations in Jiangsu and Zhejiang regions have shown a slight downward trend. Recently, domestic orders for weaving have dropped sharply, and orders from the export market have gradually weakened. Compared with last week, the overall number of shipments has dropped. Affected by this, the printing and dyeing market has seen a decrease in the number of gray fabrics entering warehouses, and the availability rate has dropped to 75%. Among them, the startup rate of most manufacturers is about 70%, and a few manufacturers have about 60%.
Towards the end of the year, orders are weak, and with the epidemic control and control, the start-up load is reduced. Some downstream companies have expressed the idea of advancing the Spring Festival holiday.
Judging from the time point when the weaving load dropped below 30% before the Spring Festival, the pre-holiday holidays in recent years have become earlier and earlier. Last year, the weaving load dropped below 30% at the end of January. This year, the weaving load is expected to drop below 30% or Will appear in early January.
Spring orders have not yet started in large quantities, and the “small expectations” for export sales have been disappointed.
“For domestic sales, for winter and spring products at the end of 2021 and early 2022, the main ordering and production time has passed.” He Lingli said that for export sales, considering the transportation time and organization of production time,…High-end summer fabrics are often ordered in advance before and after the Spring Festival.
“At present, some orders for export textile and apparel have been placed, but the performance of the weaving end has not been as boosted as expected.” CCF senior analyst He Lingli said that on the one hand, the overall supply is loose, and the gray fabric market has inventory; on the other hand, the gray fabric market has inventory; On the one hand, the continued weakening of industrial chain prices has caused orders to be placed mainly in scattered and small orders, with moderate demand and a lack of speculation.
“It is said that there are a small number of orders, but they do not bring surprises.” Pang Chunyan believes that exports will rise sharply in 2021, mainly due to foreign replenishment and the return of orders from some countries with severe epidemics. Recently, production in Southeast Asia has been stable, and the demand for foreign replenishment has also increased. Weakened, therefore, export sales did not bring surprises.
In He Lingli’s view, there is a big start in weaving orders around the Spring Festival, and more needs to be coordinated with the increase in raw materials. “It is difficult to boost the polyester industry chain market by relying on rigid demand alone. After all, the current terminal production capacity is sufficient and there is still a certain amount of weaving gray fabric inventory remaining.”
Zhang Qiang, editor-in-chief of Silk City.com, also said that the current order sustainability in the market is weak, and the number of gray fabrics entering warehouses from dyeing factories is showing a downward trend. Towards the end of the year, orders will gradually decrease, and under the influence of foreign epidemics, there will be insufficient stamina. Spring orders have been opened in November, but most of them are small batch operations.
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