Exclusive news from China Cotton Network: According to feedback from cotton spinning mills in Hubei, Henan and other places, since the end of May, not only OE yarn, but also low branch ring spinning of 21S and below Yarn shipments are relatively slow, and the price center of gravity has shifted slightly. The transaction volume of C32S, C40S and high-count combed yarns has also slowed down (high-end compact spinning carded yarns have performed slightly better in receiving and ordering orders), especially in Guangzhou, Foshan, etc. The local textile market has been greatly affected by the recent upgrade of epidemic prevention and control, power cuts, etc. The transportation, receipt and delivery of cotton textiles are not smooth. Some small weaving factories and garment factories have temporarily reduced production and delayed order placement.
A textile import and export company in Foshan said that in the past week, not only the shipments of high-count combed yarn from India, Vietnam, Uzbekistan and other countries have been unsatisfactory, but also domestically produced Downstream inquiries and orders for mid- to high-end C40S and C32S cotton yarns also show signs of weakening. On the one hand, due to the low inventory of cotton yarn, high spinning profits, and the relatively abundant cash flow of enterprises, the ex-factory price of cotton yarn has stabilized at a high level, and the discount rate is not large; on the other hand, the terminal procurement of weaving, fabrics and clothing has slowed down, which has affected the price of cotton yarn. The ability to accept and digest is weak. Inventories of cotton yarn and gray fabrics among middlemen in coastal areas have increased, and the situation of working capital has been intensified. The reappearance of local epidemic cases in Guangdong has heightened concerns among traders and textile and clothing companies.
Judging from the survey, at present, textile factories above designated size are basically accepting and arranging orders normally. Some companies whose leading products are cotton yarn with count 32S and above have already arranged orders. By around mid-July, stocks of raw materials such as cotton, polyester staple fiber, and viscose staple fiber had stabilized at reasonable levels without significant fluctuations. Some small textile mills, weaving companies and garment factories in Jiangsu, Henan and other places adjust cotton procurement and production strategies at any time based on the order situation. Cotton yarn sales would rather reduce prices and give away profits than pay for goods on credit. The purpose is to reduce the accumulation of finished products and reduce the cost of goods. The risk of cash flow being severely squeezed.
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