More than half of the traditional “Golden Nine” peak season has passed. According to market performance, although the peak season performance is tepid, the month-on-month improvement is more obvious. Downstream orders have increased, and the operating rates of spinning mills and looms have increased.
“Golden Nine” is coming to an end: Chemical fiber factories are more willing to ship goods, and weaving factories are purchasing on demand
The opening rate of Jiangsu gray fabrics continued to increase during the week of the survey, reaching more than 95%. Recently, the price of cotton yarn raw materials has been mainly stable, yarn mills have strong willingness to ship, and weaving mills purchase on demand. Orders for gray fabrics are average, and quotations for conventional varieties have increased compared with the previous period, but actual orders are very few. Dyeing factories have shown slight improvement, and shipments of thick and thick varieties are better than conventional varieties, with cotton and stretch fabrics accounting for a larger share. Terminal consumption continues to be weak, and a small number of brand customers have begun sampling new products in the spring and summer of 2023. The “Golden Nine” has not seen significant improvement, and the market may not be optimistic in the later period.
Jiangsu’s yarn-dyed fabric market is overall slow, with new orders lower than expected and a decrease compared with the same period in previous years. Most of them are small orders, and the start-up rate is basically stable. In the past half month, raw material prices have fluctuated upward, and cotton yarn prices have increased. Affected by shrinking market demand and other factors, most companies just need to purchase and buy as they go. Upstream product price transmission is not smooth, fabric prices are difficult to keep up with, and corporate operating pressure continues. Regarding the market outlook, corporate confidence is limited and most companies adopt a wait-and-see attitude.
Guangdong denim: Recently, the price of raw materials has been relatively stable, and the price of denim yarn has been relatively small. The price of OE10 British denim yarn is 15,800 yuan/ton, and the price of indigo dye is 65,000 yuan/ton. The downstream market is cautious in placing orders, companies are not satisfied with orders, and the operating rate is 60% to 70%. Corporate sales are tepid and inventory pressure is high. Domestic and foreign market expectations have weakened, demand has shrunk, and companies are under greater pressure.
Zhejiang Lanxi gray fabrics: yarn prices are generally stable, and the supply of open-end spinning yarns is tight, so prices have increased slightly. The factory operation is basically normal, and downstream orders are mainly for products with low budget. The order volume has dropped compared with the previous period, and product inventory is on the rise. The current market is weaker than in previous years, and we are bearish on the outlook for cotton prices, and it may be difficult for finished product prices to improve.
Hubei pure cotton cloth: The market environment has improved significantly, and inquiries and orders have increased, mainly small orders and short-term orders, and the products are mainly thick and thick varieties. Affected by labor shortage, the current operating rate is about 80%. Raw material replenishment is more active, and product inventory pressure is reduced. Market orders are expected to be acceptable in the short term, but expectations for the mid- to long-term market outlook are not ideal.
Major weaving factories are “grabbing” downstream orders, and there is insufficient motivation for subsequent new orders.
Looking at the market in the first half of the month, the specific performance is as follows:
1. It is easier for textile enterprises to destock finished products and increase their enthusiasm for purchasing.
Since August, due to the placement of autumn and winter orders and the low level of raw material inventories in cloth mills, the downstream replenishment and ordering volume of raw materials has increased. The inventory of textile enterprises has been depleted quickly, and the inventory of finished products in some yarn mills has returned to less than one month, especially in the medium and low levels. Some varieties. The profits of textile enterprises have also improved significantly and are now basically positive. The profits of conventional yarns are mostly around 1,000 yuan/ton. The enthusiasm for production has increased. The impact of power shortage and high temperature since September has gradually dissipated, and the startup rate of textile enterprises has gradually recovered. , mostly concentrated at 70-80%. Therefore, the enthusiasm of textile enterprises to purchase raw materials has also increased. Epidemics occur frequently in some areas. Due to epidemic control in Henan, Shandong and other places, the operating rate of some textile companies has been affected.
The current market transactions are relatively concentrated and single. Conventional varieties 32S, 40S, high-end ring spinning, and compact spinning are still the main transactions. The quotations have also increased by 100-300 yuan/ton. Other low-count yarns, open-end yarns, etc. are also available. . Among them, the trend of 32S high-end ring spinning yarn is better than that of other varieties. The market spot is slightly tight. Most yarn mills have delivery times, which range from about 15 to 30 days. The demand for combed high-count yarn is still relatively poor, and some quotations have tentatively increased, but downstream acceptance is poor. In terms of inventory structure, most of them are concentrated in high-count and combed yarns, and there is not much inventory of medium- and low-count yarns.
2. The operating rate of large weaving factories is relatively high, and new orders will fall in the future.
Compared with spinning mills, downstream weaving is slightly less powerful, with the operating rate hovering around 60%. It is understood that most of the current downstream orders are concentrated in large weaving factories. The startup load of large weaving factories is at a high level and orders have a certain delivery date. Small weaving factories are under greater operating pressure, with intermittent orders and repeated startups and shutdowns. Judging from the current price of gray fabrics, the trend is weak. Most of them are around the break-even point, and some small factories still have certain losses. At present, in Foshan, Cunyuan Road, Rongchang Road, Langbao Industrial Park and other places have seen a significant increase in receipts and shipments compared with the previous month, and there are occasional congestions. According to feedback from local merchants, the current orders are mainly due to orders received in the early stage, and the number of new orders received is insufficient. Since weaving mills mainly determine production based on sales, it is expected that subsequent purchases of cotton yarn will decline.
Merchants have different opinions on the market outlook. Some merchants expect that the peak season this year will not change much, and may continue the stage trend and gradually weaken; some merchants place their hope on spring and summer orders, believing that if the downstream spring and summer brand orders can be concentrated in October, issued, the market is still likely to improve.
The European Union “follows the trend” of the United States, and domestic companies need to prepare early
What needs special attention is that on September 14, European Commission President von der Leyen released a legislative proposal. The proposal stipulates that products produced with forced labor will be prohibited from being sold and made available on the EU market. raiseIt stipulates that products found to be produced by forced labor can neither be sold in the EU nor exported from the EU to other countries. Products already on the EU market will have to be withdrawn. This proposal needs to be discussed and agreed by the European Parliament and the Council of the European Union before it can be adopted, and will come into effect within 24 months after adoption. Some cotton textile, clothing companies and foreign trade companies said that there is a high probability that the European Union will “follow the trend” of the United States and ban the import of Xinjiang cotton products. Therefore, domestic companies need to prepare early and find a breakthrough.
According to statistics, in the first half of 2022, my country’s cumulative textile and apparel exports to the EU were US$23.23 billion, a year-on-year increase of 13.2%. Among them, the export volume and price of large categories of knitted and woven garments increased by 0.8% and 27% respectively, driving an increase in export volume of 27.9%. %. However, in July, my country’s clothing exports to the EU and Japan declined for the first time, by 2.1% and 5.8% respectively. In addition to the negative impact of geopolitical events such as the Russia-Ukraine conflict on the global economy and high overseas inflation, which inhibited the consumption of clothing products In addition to its role, the EU’s “following the trend” of the US’s import ban on Xinjiang cotton (which some clothing brands and retailers are already implementing) is also a key factor that has led to a sharp decline in the growth rate of textile and clothing exports to the EU.
Overall, although there are certain orders placed in the market at present, the order volume is not large. Most of them are autumn and winter orders, and the continuity is not strong. There is a lack of large orders in the market. The average order is only about 70% of previous years. The operating conditions of weaving manufacturers are also poor. More differentiated. The varieties of yarn orders are relatively concentrated, and only a few varieties can be sold. Although the short-term profits are good, due to the continuous losses in the early stage, some small factories are still under tight financial pressure and operating pressure. Therefore, the current mentality of selling goods is strong. I hope to cash out the profits as soon as possible. It is expected that the “Golden Nine” will continue the status quo, with mostly stable and volatile trends. In the latter part of the peak season, we need to pay attention to the order situation in spring and summer.