Capital And Inventory Pressure Increased &Nbsp; Enterprises Should Make Preparations For "Protracted War".

As we all know, March and April is the peak season of traditional textile sales in China. However, this year, it encountered a rare and mild situation. Sales of cotton yarn and grey fabrics were blocked, and prices dropped sharply.

At present, the domestic cotton yarn and grey fabric manufacturers are abundant in stock and have strong willingness to take the initiative, but the price is not falling. Among them, the middle and high count yarn and grey fabric are especially strong, and basically below the cost line.

C32S cotton yarn market value fell to 35500~36000 yuan / ton, since March, the cumulative decline of 4000 yuan / ton, C32S * 32S 130 x 7063 "2/1 fine oblique cloth (jet) average price of 11.50 yuan / meter, JC60S * JC60S 90 x 8864" 1/1 fine cloth (light side) 7.80 yuan / meter, the cumulative decline has reached 2 ~2.50 yuan / meter.

In 2010, China's cotton textile enterprises achieved good results, reaching the best level in history, and their profits increased by more than 60%.

This year, we have entered the off-season ahead of time, leaving many companies unprepared.

Capital is tight and profits are hard to speak. Enterprises are in a dilemma.

Although the prices of the three major cotton textile raw materials, such as cotton, sticky, short and short, have been significantly reduced recently, the overall operation of cotton textile enterprises is still at high level.

Moreover, the sale of downstream products such as cotton yarns and grey fabrics has been difficult this year. The product has been overloaded, many products have fallen below the cost price, and the speed of cash withdrawal has slowed down. The cash flow of the cotton textile enterprises is becoming more and more intense.

In addition, this year's inflation situation has been highlighted, and commodity prices such as gold, silver and oil have gone up crazily.

The state has put inflation in check and tightened monetary liquidity in the first place. Banks have tightened their money. At present, the deposit reserve rate has reached 20.50% of the highest historical value. The one-year deposit and loan interest rates have risen to 3.25% and 6.31% respectively. In the latter part of May, it is possible to continue to raise the reserve ratio or raise interest rates.

Textile enterprises are also suffering from "fish in the pond" in this round of regulation and control. Financing is difficult and cost is high.

High inventory, policy overlay, pessimism spread

In the past, China mainly relied on the three carriages of investment, exports and consumption to stimulate industry growth. This year, with the pressure of cost pressure and the rapid appreciation of RMB and the superposition of Japan's earthquake and the turmoil in the Middle East, export growth has slowed down this year and the first trade deficit in the first 6 years.

Because of the low market boom and tight money this year, investment in the industry has been suppressed, and domestic consumption has always been a low proportion of GDP, resulting in a "collapse" of market demand. In March and April, sales of cotton textile enterprises had already entered the off-season in advance, and the stock of cotton textile enterprises has been increasing. Most of them have reached the "red line" above the stock level from one month to one and a half months, and some have reached two months' high water level.

It is understood that more than 20 thousand spindles of cotton mill basically have 100~200 tons of cotton yarn stock.

Therefore, under the situation of total growth and oversupply, the pressure on enterprises is bigger. Textile enterprises in Hebei, Sichuan, Chongqing, Huilong, Shandong, Heze, Gaomi and so on are going to stop production or vacation, and about 30% of the small and medium-sized factories in some areas are going out of business in order to resolve the crisis.

As the price of cotton spinning materials is rising and falling, downstream customers are facing cotton yarn.

To sum up, the textile industry in 2010 has been overdrawn ahead of schedule. This year, with the market demand sluggish, and the tight capital side and the fear of high inflation, the good situation is fading away, and the market continues to be weak.

Today, with the gradual loss of low cost advantages, enterprises with strong financial strength are taking the initiative, and a large number of small and medium-sized enterprises are in a difficult position. "Reducing efficiency and improving efficiency" is the way to go. In the late stage, we must prepare for the "protracted war" ahead of schedule.