Cotton Crazy &Nbsp; Yarn Business Profits Shrink

"The price of cotton guidance is up 1000 yuan a day, and it has risen to 26 thousand yuan per ton yesterday. This is what I do.

At the end of last year, the cotton market was once optimistic. Cotton prices continued to soar in the first half of this year. Until this month, the price of "one day, one price" began to worry the textile enterprises.

In order to control the rising trend of cotton crazily, China

According to industry analysis, the contest with cotton will last until the four quarter.

Yesterday, the national cotton working teleconference was further promoted.

Reality

Cotton textile enterprises: "the first half of the year is very good, now all in a hurry."

Zhejiang Lima group began to set foot in the textile industry in 2002, mainly for fabric export. Zhang Shugen, chairman of the company, just attended the French fabric exhibition last month. But in the face of numerous international orders at the exhibition, he did not pick up one.

"The price of cotton in China is too high, so I can't answer it."

He describes that a lot of monads can't pick up the state, "it's really hard."

More than 85% of the group's textile orders belong to export orders. In the case of a 30% rise in cotton prices plus RMB appreciation factors, Zhang Shugen said that compared with the good momentum in the first half of the year, it is now in a predicament.

"We do not accept large bills and long-term bills, and only take some short-term bills. Therefore, the volume of business has been greatly reduced."

Zhang Shugen's textile business doubled its output value over the previous year. At the end of last year to September this year, the cotton textile industry was developing rapidly and its profit growth has been maintained at over 60%. Therefore, the group has made full use of its power to expand production. Zhang Shu Yuan also invested 150 million yuan in the production of cowboy cloth at the end of last year.

Zhang Shugen said, "now is very confused, can only continue to wait and see."

Zhang Shugen was also worried about the director of Hangzhou Zhonghui cotton spinning company. He said that the current cotton prices rose by at least 3000 yuan / ton compared with the previous month. Some of them were out of control, too abnormal. "Sales promotion factor is not the main reason for the rise of cotton, and panic psychology has been widespread, not a good phenomenon."

Yarn business: "cotton spinning industry has never been such a good market since its birth."

Downstream cotton spinning enterprises complain one after another, but the upstream yarn business is very optimistic.

Xiao Liu is a salesman of Xiaoshan Shuang Da Textile Co., Ltd., specializing in the sale of cotton yarn to downstream enterprises. In the past few months, cotton yarn, which is mainly buyer's market, has collapsed. In recent months, it is the first time for us to pick buyers and sell them for many years.

In his view, this year's cotton textile market is in short supply, which is a great opportunity.

"Cotton spinning industry since its birth, has never had such a good market."

The profit margins of yarn enterprises are not large, cotton prices are rising, yarn prices are rising, and some cotton yarn enterprises have increased the price of yarns due to the shortage of supply, which has further increased the cost pressure of downstream textile enterprises.

The rise in cotton prices has also driven up the price of chemical fiber raw materials.

Wu, who works in a chemical fiber enterprise in Xiaoshan, told reporters that the price of cotton was lower than that of artificial cotton in the past. This year the price has been upside down. "Many enterprises began to replace chemical fiber instead of cotton yarn, and the market of chemical fiber reached its peak this year."

Countermeasures

Textile enterprises are forced to adjust their product mix.

"We began to slow down production and try not to take orders."

Hangzhou Zhonghui cotton spinning said that in fact, many cotton textile enterprises in Zhejiang have slowed down production. Some enterprises have chosen raw materials such as chemical fiber, polyester and viscose instead of cotton yarn raw materials.

According to Xinhua news agency, many people in the industry pointed out that cotton price inflation is harmful and not worth a profit.

On the one hand, if cotton prices go up further, the upward pressure will soon be pmitted to the downstream textile and garment industry. Clothing prices can hardly be avoided. When the global economy has not yet recovered, the textile and garment industry will inevitably be damaged. On the other hand, if the cotton price rises sharply, it will be more difficult to predict.

Because the use of fine yarn can save more than 50% of the cost, the use of fine yarn instead of coarse yarns is the latest way of dealing with the group. "Now we mainly develop high-density and high density products. The fine yarn has accounted for 40% of the total production, and now it has increased to 70%."

Zhang Shugen said that the price of fine yarns was increased by a small margin, and cost saving is now his top priority.

"The first is to wait for prices, adopt flexible orders, and abandon the medium and long term orders. Second, we should adjust the product mix and minimize the use of cotton raw materials; third, we will continue to develop new varieties and tackle the crisis of raw materials."

Zhang Shugen believes that under such circumstances, enterprises must help themselves.

Silk companies are also affected by raw materials. "The price of silk has doubled this year, reaching 340 thousand yuan per ton."

Daly, chairman of the textile Co., Ltd., Fei Jianmin, told reporters that not only the price of silk has increased, but also the cost of labor has risen substantially. Although the order for silk received this year is much higher than that of last year, the profit has been reduced by 10%. In such a case, Fei Jianmin has to reduce output. "At the same time, a portion of printing and dyeing business will be restricted for energy conservation and emission reduction."

Seven ministries and commissions of the state discuss countermeasures

"Zhejiang is a big province of textile, and clothes should be clothed. This is a deep-rooted concept of ordinary people. Although chemical fiber develops very fast, cotton is still the main raw material of textile industry."

Yao Ting, Deputy Secretary General of Hangzhou Textile Association, analyzed that although textile enterprises in Zhejiang were less than 60% of their raw materials, they still had a greater impact.

"Cotton prices are rising too fast because of the imbalance between supply and demand.

Zhejiang province has about 8000000 spindles per year and Hangzhou accounts for 1/4.

The demand for cotton is increasing every year. The demand for only 40 million spindles ten years ago has reached one hundred million this year.

But we are not cotton producing areas. Most of the dependence on raw materials comes from outside the province or even abroad.

Yao Ting told reporters that in recent years, domestic cotton has been affected by weather and other factors, and its output has declined. In 2009, China's cotton production was 6 million 400 thousand tons, a decrease of 1 million 100 thousand tons compared with 2008, and its decline was nearly 15%.

On the other hand, last year, cotton production in Xinjiang and other main cotton producing areas decreased by nearly 1/4 due to climate disasters and other reasons, which further aggravated the contradiction between supply and demand imbalance.

At the same time, the international cotton price is also on the rise, while cotton exporters such as India have suspended cotton exports, and cotton prices are unlikely to fall in the short term.

"Cotton demand gap has also triggered some people's hype behavior, speed up the rise in cotton prices."

To this end, yesterday's national development and Reform Commission, the Ministry of Finance and other seven national departments jointly held the national cotton working teleconference.

China will take 5 measures to maintain the basic balance between supply and demand of cotton and promote stable development of cotton production, protect cotton farmers' interests, protect cotton needs, stabilize market cotton prices, standardize circulation order, prevent and control operational risks, and deepen quality control reform.

The meeting also proposed to promote the pformation of the textile industry development mode, speed up the structural adjustment and industrial upgrading of textile industry, intensify efforts to eliminate backward production capacity, and prevent large-scale blind expansion of general capacity.

The meeting held that it is possible to maintain the basic balance of total cotton reserves through effective reserve regulation and effective utilization of international market resources.

Forecast

Fourth quarter price

It is possible to stabilize.

A cotton textile industry analyst said that cotton already has certain financial attributes, and the price of funds has a huge role in promoting its price. It is expected that the difficulty of cotton prices will be further increased. The cotton price is in the top area. However, considering that a large number of new cotton will only be available in mid 10 months, "the possibility of cotton prices going crazy in the short term will be great."

"The current cotton price is unbearable for small and medium-sized textile enterprises."

Yao Ting, Deputy Secretary General of Hangzhou Textile Association, analyzed, "cotton prices continue to boom, will continue to be pmitted to downstream enterprises, downstream enterprises are likely to not accept this high risk, resulting in supply chain fracture."

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He predicts that in the current trend, if the state continues to sell cotton reserves and increase export quotas, plus new cotton will soon be on the market, cotton prices will stabilize in the fourth quarter.

Link

Cotton prices skyrocketing:

Imbalance between supply and demand?

Many people in the industry attributed the rise in cotton prices to cotton supply and demand.

On the one hand, the weather factors led to the delayed domestic cotton picking and the decline in quality. India suspended cotton exports for the rest of the world. On the other hand, the demand for cotton textile products at home and abroad was relatively strong. In the first 8 months, China's textile and clothing exports grew by 23.8% over the same period last year, leading some market participants to believe that cotton supply and demand will be reduced to the direction of inventory reduction in the coming year.

Analysts also pointed out that capital is the key factor to drive the cotton price soaring.

Domestic cotton has always been skyrocketing and plummeting. The key reason is that some processing areas, circulation areas and cotton textile enterprises always expect low price hoarding of cotton to make profits, causing sharp changes in the inventory of enterprises and society, resulting in a sharp rise and fall in cotton prices.

According to Xinhua news agency, Zhang Bin, an analyst of state textile securities, which keeps track of cotton textile industry, pointed out that this year's funds not only involved in the cotton speculation in the past years are still in existence, but also that new funds have been added. Obviously, some funds are stockpiling goods through the spot market and gain huge profits in the futures market.

"Under the so-called market expectations and capital participation, the soaring cotton prices become inevitable."