Judging from the survey, in mid-January, small and medium-sized cotton textile factories in Henan, Shandong, Hebei, Jiangsu and other places began to reduce production, suspend production, and take vacations. Zhengzhou, Xuchang, Anyang and other places in Henan were affected by the sudden outbreak of the epidemic, which affected the cotton textile and clothing industries. The impact of orders/production is also greater. The trading volume of the entire cotton and cotton textile market has gradually weakened and prices have stabilized.
Due to the recent continuous upward breakthroughs of the Zheng Cotton CF2205 contract, the cotton spot quotation and fixed price have increased accordingly, while the increase rate of cotton yarn has obviously lagged behind that of cotton futures. The profits of textile enterprises have declined and even production and sales have been reversed. In addition, most cotton prices have so far The gauze inventory rate of textile enterprises is not high and is below the “warning line”. Therefore, textile enterprises are reluctant to sell before the Spring Festival and look forward to a sharp rebound after the Spring Festival.
Traders in the light textile markets in Shaoxing, Nantong, Foshan and other places said that in early January, there were obvious signs of softening in cotton yarn inquiries and transactions. Some cotton mill offices and individual traders were closing their doors one after another and going home early to celebrate the New Year (some recently (Affected by multiple epidemic factors in Zhejiang, Shaanxi, Henan, Tianjin and other places), shipments are mainly small batches and sporadic replenishment. However, traders and cotton spinning mills have continued to regain confidence in the cotton yarn market after the Spring Festival. In addition to comparing with cotton, In addition to the demand for cotton yarn to make up for the increase, there are also the following three factors:
First, on January 1, 2022, the Regional Comprehensive Economic Partnership Agreement (RCEP) will officially come into effect. RCEP will help the textile industry reduce export costs and expand export benefits. In particular, exports to new free trade partners such as Japan and South Korea will be accelerated (zero tariffs will be achieved on most Chinese textile and apparel products within 15 years).
Second, the recent COVID-19 epidemic has had a relatively large impact on enterprises in major production areas such as cotton gauze and clothing. Not only production and delivery have been affected, but transportation and logistics have also been very unsmooth due to epidemic prevention and control. Therefore, post-holiday supply may be limited. A pattern of periodic tension and rising prices.
Third, recently the State Council, the State Council, the Ministry of Commerce and other ministries and commissions have continuously introduced measures to stabilize growth, stabilize expectations, secure orders, and promote foreign trade. The central bank has also stepped up cross-cyclical adjustments, making overall plans to connect this year and next to maintain reasonable liquidity. Sufficient, keep the growth rate of money supply and social financing scale basically consistent with the nominal economic growth rate, and provide relief to textile and clothing enterprises.
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