Editor’s Note
Since March 24, foreign orders have been canceled and postponed one after another. It is expected that export value and export volume will continue to decline sharply. Domestic textile companies are facing the second The situation of production suspension and production reduction. In terms of upstream raw materials for cotton textiles, due to shrinking demand, domestic cotton supply is sufficient, and cotton prices have been stable and declining recently; oil prices have fluctuated sharply, and chemical fiber staple prices have continued to fall; viscose staple fiber has continued to record highs under the heavy pressure of the downstream market Historically low; currently, the overall supply of cotton textile raw materials exceeds demand and prices are low.
Early morning of April 21, Beijing time , U.S. crude oil fell into negative territory as never before, with the WTI May contract closing at an eye-popping -$37.63/barrel, a drop of 305.97%. Some institutions analyze that due to the rapid reduction of oil storage space in the Oklahoma warehouse, an important crude oil delivery place, WTI is approaching delivery in May, and the cost of opening a warehouse in June is too high, prompting traders to sell aggressively.
Negative oil prices inevitably caused great panic in the market, and the three major U.S. stock indexes fell together that day. On April 21, the commodity futures market opened with a large area of green. Zheng cotton was not spared on April 21, with CF09 falling by 2.36% to 11,165 yuan/ton; PTA falling by 2.64% to 3,314 yuan/ton.
△WTI May crude oil futures daily K-line trend
Where will the yarn market go in the future?
Recently, the yarn market has become more deserted, with fewer orders than in March, making the already sluggish enterprises even worse. In the Foshan market, according to a company, the 26-count yarn and 40-count yarn that originally sold well in February and March have become flat as early orders are gradually completed. In the Shengze market, except for C32S and JC40S, which are mainly used in the air-jet nylon series, the demand for other varieties is relatively light. The pure cotton yarn market continues to be weak, downstream procurement is sluggish, and combed varieties are significantly worse than other varieties.
△Textile market trends on April 21
Due to a large number of foreign trade orders being cancelled, many foreign trade companies have switched to domestic sales, making domestic orders extremely popular. In a random survey of some companies, some companies said that in order to grab orders, textile companies did not hesitate to significantly reduce prices. Most manufacturers reduced prices by 1,000-2,000 yuan. Even so, most textile companies said that it is difficult to get orders, and raw materials are purchased according to the orders, and they dare not stock up. Some companies with large raw material inventories said they suffered serious losses. At present, spinning mills and downstream cloth lines mainly focus on cleaning up. Inventory sales are the main focus, and the mentality of shipping is relatively strong. There are no new orders from the downstream. Various cost expenses such as labor, factory buildings, raw materials, etc. have caused companies to be eager to ship goods to collect funds, and they have repeatedly cut prices. The price war in the market has intensified. , causing a vicious cycle in the market. Some textile factories simply limit production, take shifts or take holidays to relieve operating pressure.
Although the market is not satisfactory, as the domestic epidemic situation improves and the domestic economy is slowly recovering, most companies still choose to persist and are unwilling to give up easily.
Imported yarn cannot be sold anymore
In recent days, cotton yarn from Ningbo, Qingdao, Shanghai and other places Trading companies reported that not only customs clearance, spot cotton yarn inquiries, and shipments continued to be light, but also “futures yarn” (mainly shipping dates from May to July) that had just improved in early April could no longer be sold, especially in Vietnam, The demand for OE yarn and 8S-16S Siro spinning yarn produced in Pakistan, Thailand and other places is getting weaker and weaker.
An import company in Zhejiang stated that at present, except for a small amount of medium-grade and high-grade C21S-32S package-bleached yarns from Vietnam, India, Pakistan, and Uzbekistan, there are inquiries and shipments. In addition, other products including JC20S-32S, OE yarn, and high-count compact spinning yarn have become “hot potatoes.” Since early March, the company has taken various measures to slow down the pressure on the arrival, delivery and sales of imported yarns in some yarn contracts from India, Pakistan and Uzbekistan, such as breach of contract, negotiation to terminate the contracts, and delayed shipments. Otherwise, the cash flow may have been broken long ago. According to the survey, although the volume of Indian cotton yarn arriving at Hong Kong declined from March to April, due to more imports and less exports, the cotton yarn inventory at my country’s ports continued to rise (bonded + non-bonded), which put some cotton yarn traders under great pressure.
The cotton spinning industry is experiencing a “cold winter”
Currently, the domestic cotton spinning industry is facing pressure It is getting bigger and bigger. Although the domestic epidemic has been brought under control and the operating rate of enterprises has tended to return to normal levels, the sharp decrease in orders has seriously threatened the survival and development of enterprises. According to official statistics, the textile and clothing industry is among the hardest-hit areas in this round of economic recession.
According to data from the National Bureau of Statistics, in March, the added value of industries above designated size actually decreased by 1.1% year-on-year. Looking at the three major categories, the added value of the mining industry increased by 4.2% year-on-year, 1- In February, it fell by 6.5%; the manufacturing industry fell by 1.8%, the decline narrowed by 13.9 percentage points; the electricity, heat, gas and water production and supply industry fell by 1.6%, the decline narrowed by 5.5 percentage points. In terms of industries, the added value of 16 of the 41 major industries maintained year-on-year growth, but the textile industry fell by 5.5%. It can be seen that the decline in the textile industry is significantly higher than that of other industries and industries. </��'s key areas of focus.
This epidemic has a great impact on the economy, and the international impact is far greater than expected. From the perspective of unfavorable factors, domestic consumption may experience a negative cycle, with employment issues leading to consumption. Problem; From the perspective of positive factors, it may change our lifestyle, and the demand for clothing will pay more attention to environmental protection, practicality and simplicity.
From an enterprise perspective, future development should pay more attention to three points:
First, insist on being distinctive and cost-effective products to build the company’s own core competitiveness.
The second is to vigorously develop online sales channels. At present, online sales are developing relatively well, but the problems of supply chain docking and information asymmetry are also prominent. Customers generally require delivery within 15 days, and returns without reason within 7 days are a test for manufacturing companies. How to connect the traditional industrial chain and e-commerce well and increase the symmetry of data information is the direction that companies should think about later.
Third, there is an increasing demand for functional products and comprehensive health products, which are also categories that companies should focus on in the future.
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