After seeing that the textile market has been rising in recent times, many textile people may be filled with various questions. The prices of raw materials are rising in various ways. You don’t need to ask. Friends in your circle of friends will already tell you which raw materials are rising again, which ones are rising sharply, and which ones are no longer available at high prices.
Cotton yarn surged 10% in a week
As of February 25, 2021, CY C32S pure cotton The yarn price closed at 25,450 yuan/ton, an increase of 1,455 yuan/ton in just one week.
The ex-factory price of cotton yarn is “adjusted once a day or even twice a day”, and spinning profits increased compared with the fourth quarter of 2020, mainly due to low cotton yarn inventories and sufficient liquidity in cotton spinning mills And the impact of rising inflation caused by the surge in crude oil, chemical sources and chemicals, etc. As of February 25, the spot profits of textile companies were at the level of 1,500 yuan/ton.
Judging from the quotations of cotton yarns from spinning companies, the prices of various types of cotton yarns are now significantly higher than before the Spring Festival by 1,500 to 2,000 yuan/ton. Cotton spinning mills are full of confidence in their production and operations this year, and post-holiday purchases and sales are quickly on track. In terms of construction start-up, the holiday period for textile companies before the year of 2021 will be postponed, and the start-up will be advanced after the new year, and the start-up recovery will be faster. According to the lunar calendar, the start-up rate on the eighth day after the holiday is nearly 10 percentage points higher than that in 2018 and 2019. Yarn inventory is significantly lower than in previous years. As of February 25, China’s yarn inventory index closed at 9.2 days. If the peak season in March-April arrives as expected, textile companies will continue to be in short supply.
After investigation, most textile companies are currently actively completing pre-holiday lint cotton ordering contracts and organizing lint cotton storage into warehouses to prevent upstream ginners and traders from breaking contracts due to the skyrocketing cotton prices. occurs; at the same time, appropriately purchase the urgently needed lint for cotton distribution.
In terms of cotton yarn sales and shipments, we have promptly adjusted the idea of rushing out pre-holiday orders after the holiday to complete the contract in a timely manner. Instead, we have changed to completing pre-holiday orders in installments, giving priority to them. Supply the cotton yarn purchased at high prices after the festival and actively deliver the goods. Many textile company bosses believe that “there is wine now and drunkenness tomorrow”. At present, they should run at full capacity, seize the opportunity to produce and sell, and strive to complete 70% or even higher of the 2021 annual profit target and production tasks in the first half of the year.
Downstream weaving mills are fully operational
As of February 25, China’s gray fabric load index has It soared from 24.3% on the 19th to 57.5%, more than doubling. In terms of price, CG C32 full gray fabric has also risen to 6 yuan/meter, an increase of 9.29% compared with 5.49 yuan/meter on the 19th. However, compared with the upstream cotton yarn that surged by more than 10% in February, the current price increases of gray cloth, fabrics, clothing, etc. are significantly lagging behind. Export-oriented companies and processing companies are becoming more cautious in accepting orders. Whether they can withstand and digest the rising costs remains to be seen. Break-in.
On the other hand, the U.S. government continues to impose tariffs on US$370 billion of imported Chinese goods and continues to impose an import ban on Xinjiang cotton products. Brands and retailers in textiles and clothing from Europe and the United States and other countries have The increase in unit purchase price is relatively limited or even unacceptable. The direct result is that foreign orders will either continue to be transferred to Southeast Asian countries; or Chinese companies will receive orders with low profits, no profits or even losses. At present, the mentality of weaving mills is still cautious, believing that without demand support, even if raw materials help to increase, it will not be able to form a sustainable market. However, as long as upstream cotton yarn remains in short supply, coupled with expectations for an improvement in the epidemic, it is unlikely that the gray fabric market will experience a unilateral decline in the first half of this year. The fluctuation of cotton prices is normal market behavior. As long as the amplitude is relatively controllable, there is no need to deliberately reduce production. , therefore the factory capital chain may affect the factory start-up load in the first half of 2021. The inventory of factories with sufficient funds may increase slightly, while factories with tight funds will pay more attention to the production and sales ratio.
Price increases from top to bottom, and downstream customers generally accept them
Recently, various fabrics have increased We have seen too much price news. The main reason for the increase in fabric prices this time is the sharp increase in raw material prices. It is quite common in the near future for fabric prices to rise once a day or even half a day.
“One of the raw materials we often make was 7,000 per ton at the end of last year. It has reached 9,000 in the past few days, and it is estimated that it will exceed 10,000 in a few days.” A person in charge of a company The man said.
The 20-30% increase in raw materials has made many weaving companies extremely regretful. Due to the poor market conditions last year due to the global epidemic, raw material prices continued to fall, causing many companies that prepared raw materials before the 2020 Spring Festival to suffer heavy losses. Therefore, many companies are extremely cautious this year, buying and using raw materials as they come, and have no intention of stockpiling large quantities of raw materials.
Downstream customers generally find it difficult to accept large increases in a short period of time, mainly because most of the orders in their hands are from a year ago, and this part of the quotation is also based on the market price reported a year ago. Yes, but the current increase has basically eaten up all profits. In order to retain orders and customers, some trading companies can only accept it with tears.
To sum up, the power of this surge in raw materials is not the fundamentals of supply and demand, but the intensity of funds and speculation. Judging from the recent series of actions by the central bank, expectations for “ultra-loose” monetary policy and large-scale water release in 2021 have been significantly weakened, and steady or even periodic tightening has become the main tone. However, the trend of Sino-US relations is not stable.Lang Lang, whether Trump or Biden comes to power, suppressing China will always be the core of the United States.
Perhaps only after the prices of raw materials and fabrics stabilize, the textile market can truly usher in a full peak season. </p
