According to recent surveys of cotton spinning mill customers and middlemen in Henan, Hubei, Jiangsu and other places, the current inventory of cotton, polyester staple fiber and other raw materials in small and medium-sized spinning mills is low, and some companies are “waiting for rice to be ready”3 A small amount of purchases were launched in the first and middle of the month, but the current inventory has generally dropped to less than 30 days.
Although cotton yarn and gray fabrics have gradually accumulated in inventory since March, the inventory pressure of finished products is not great so far, and most of them are lower than the same period in the previous two years. It is also worth noting that several small and medium-sized cotton textile companies have reported that orders from May to July are insufficient and plan to adjust their product mix. In the past half month, the consumer demand for C40S and C32S cotton yarns in Guangdong, Jiangsu, Zhejiang, Shandong and other places has continued to pick up (especially the inquiries and transactions of medium-grade carded 40S cotton yarns have improved significantly), while OE yarns, low-count ring spinning and Shipments of high-count yarns of 60S and above are still relatively weak, while the production and sales situation of large enterprises is relatively smooth. The phenomenon of increasing credit difficulty, tight capital flow, and high pressure for payment collection is not obvious.
When will the next replenishment of cotton and other raw materials for textile companies start? The author believes that although the procurement of raw materials by domestic cotton spinning enterprises has been delayed than expected due to multiple factors such as the resurgence of the COVID-19 epidemic, rising uncertainty in Sino-US and Sino-European relations, and the sharp appreciation of the RMB against the US dollar, restocking will be carried out again around mid-May. The probability is high, or due to the obvious seasonal differentiation of cotton yarn demand, the procurement is mainly cotton of 4127, 4128 and above grades.
First, most of the cotton and other raw material inventories of cotton spinning enterprises are concentrated in about one month. From a time point of view, appropriate procurement needs to be done by mid-May at the latest to avoid affecting cotton allocation and rowing. Orders and production;
Secondly, from the perspective of domestic and foreign sales orders, C26-C40S conventional yarn consumption was dominated from April to June. The current inventory is generally low, and cotton spinning mills need Promptly purchase cotton with medium-level indicators into storage and arrange orders;
Third, in the absence of official confirmation of policy information in the first half of the year, some companies control cotton stocks and hold currency to sell. Textile companies have recently been forced to enter the market to obtain goods;
Fourthly, before the end of April to mid-May, the credit pressure on cotton spinning companies is expected to be reduced, and capital flows will be replenished, which will effectively support cotton and other industries. collecting materials. At the 2021 Annual Meeting of the China Development Forum, Yi Gang, Governor of the People’s Bank of China, said that our country has greater room for monetary policy regulation. China’s monetary policy has always remained within the normal range, with adequate tools and means and moderate interest rates. The industry expects that the central bank may release liquidity in the near future to meet the normal funding needs of enterprises. </p
