In June, the market’s regular off-season is approaching, and the market confidence of spinning companies is low. Regardless of domestic demand or foreign trade, companies generally believe that the downstream market will enter the off-season, and the cotton textile industry will once again face a big test. Small and medium-sized textile enterprises may once again face the crisis of production reduction and shutdown.
Domestic demand: The prelude to the off-season, small and medium-sized enterprises are under pressure
From the perspective of consumption habits and downstream replenishment timing, July and August will enter the off-season, and orders will be in short supply. Industry experts said that from June to September, some small and medium-sized enterprises may face pressure to reduce production, shut down, take holidays or even close down.
Exports: Prelude to holidays, fewer orders
The EU generally closes holidays from July to September Countries such as France, Italy, and the Netherlands have to take a high-temperature holiday for at least a month. Therefore, export orders in the market are relatively small in June and July, and will only increase again in August and September. Therefore, the downstream market in June and July is generally not optimistic, and the market will not pick up until August at any time.
Cotton: Cotton has been rising
Into June, Zheng cotton futures prices have been rising. Recently, The main CF2009 contract of Zheng cotton futures remains at around 12,000 yuan/ton. After a short-term rise in spot prices, cotton prices have stabilized in the range of 12,500-12,700 yuan/ton (the delivery price of Xinjiang cotton from Shandong warehouse). On June 10, the settlement price of Zheng Cotton’s main CF2009 contract was 12,035 yuan/ton, an increase of 465 yuan/ton from the settlement price on the 1st. The China cotton price index was 12,103 yuan/ton, an increase of more than 300 yuan/ton from the 1st.
Yarn: Cotton prices increased, but yarn did not follow suit
Cotton prices increased, It has not been transmitted to the downstream, and the yarn price has not followed the increase. The current cotton price is around 12,000 yuan/ton. Cotton spinning companies will definitely lose money when used to spin yarn. In addition, the company’s inventory is large, and currently companies are mainly destocking. . For cotton spinning companies, raw materials have increased but products have not, which is really painful! Fortunately, cotton prices have stabilized recently, which has temporarily reduced the impact on textile companies, and also bought time for textile companies to digest inventory in a timely manner and receive new orders.
Although conventional yarn is currently shipped normally, the quantity is not large, especially the sales of pure cotton yarn are average. On June 11, the price of pure cotton yarn 32S was 18,745 yuan/ton, the price of OE10S was 11,875 yuan/ton, the price of JC40S was 22,115 yuan/ton, and the price of TC45S was 15,545 yuan/ton. Regardless of the size of the orders in the market, competition is very fierce. , the order-rushing situation has led to confusion in the quotations in all aspects, and the operability is very unstable. As a result, every time we receive an order, we have to invest more energy in following the order to ensure the smooth delivery of the order.
According to the survey, currently, textile enterprises in Henan Province are relatively polarized. Largely, most companies producing mid- to low-end cotton yarn have returned to normal production, while some companies producing high-end products are still facing some operating pressure. A person in charge of the company said that the company’s combed yarn sales are slow and carded yarn is shipped quickly. Therefore, the product line is changed in a timely manner to produce carded products with high market demand. In response to the problem of reduced market orders that are about to enter the industry’s off-season, the person in charge said that the company’s high-quality cotton yarn is of excellent quality and its downstream customers are stable, so it is not worried about a reduction in orders in the future. Another company said that the market for mid- to low-end cotton yarn sold domestically is stable.
There are three main reasons for the current serious differentiation of enterprises: first, seasonal demand changes; second, differences in product positioning; Third, downstream consumption has generally shrunk and consumption has been downgraded.
Judging from the current situation, the market in June and July is hardly optimistic. It is recommended that textile companies still need to seize the opportunity to destock. , reduce liabilities, and timely adjust product structure according to market demand, and produce products with high market demand to improve corporate liquidity.
Weaving factory: foreign trade has not improved and orders are few
Recently, the foreign trade market has not improved, and there have been fewer orders. Especially recently, the downstream market has turned sluggish again, which will have a great impact on the entire textile market.
Recently, the sales of thick fabrics in the market are acceptable. Although there are some orders, the overall orders are not large. There are signs of increase in customized weaving quotations, but they are mainly concentrated on small batch orders and lofting.
In addition, recent home textile orders have increased slightly compared with the previous period, inquiries have also increased, and shipments of conventional gray fabrics have increased. , but prices remain weak. Orders from dyeing factories are scarce, prices are relatively lower than in previous years, and some factories are on holiday.
Weaving factories have experienced weak prices and insufficient orders in large areas, leading to two situations: one is partial shutdown, and the other is backlog of inventory. The current situation faced by spinning mills is difficult to improve in the short term.
As for the impact of the epidemic, some spinning companies said that the global development of the epidemic has had a negative impact on exports:
On the one hand, in the early stages of the outbreak abroad, a large number of orders that had been placed were cancelled, and some were almost finished production.��, the customer suddenly canceled the order, resulting in a certain order loss.
Second, new export orders have dropped significantly. Port and passenger flow restrictions brought about by the epidemic have significantly reduced flexible clothing consumption. A large number of clothing stores have closed, and many Factories that rely heavily on foreign trade are faced with the situation of having no orders to accept.
The third is that after some export orders arrived at the destination port, they encountered customer bankruptcy, customers refused to pick up the goods, and the port was closed and unable to unload the goods, resulting in certain losses.
Of course, such cases are only a few, but it also makes the factory extremely cautious when accepting external orders, and it is also more demanding in terms of payment methods, otherwise it would rather not accept them, so it is difficult for both parties to reach an agreement. , and finally some orders were lost to Southeast Asia and other places. </p
