Cotton Surges 1St Anniversary &Nbsp; Textile Enterprises Are Dying.

In mid May, Zhangjiagang bonded area, from cotton delivery warehouse to cotton spinning factory, was filled with air.

"We are now losing a lot of money, but we are afraid of a dead end."

The head of a textile enterprise is worried.

At this moment, cotton fell 30% from the top of the mad cow. Most of the small and medium-sized textile enterprises were in a predicament because of high inventory accumulation and lack of downstream orders.

Reporters can not recall that in 2010, a textile worker's work scene was photographed at a textile factory in North China: cotton prices soared, and the textile industry was in the spring of ten years hard to meet, a thriving image.

In the past year, cotton futures turned from a few people to a star in the futures market, once surpassing copper's dominance in the futures market.

The price rose from 17000 yuan per ton in May last year to two yuan in November and February this year, and now it has dropped to around 25000 yuan, which has given the whole industry a sense of "sky and underground".

It also exposed the weaknesses of the cotton textile industry "relying on heaven".

Futures Company stakeholders told reporters that compared with the non-ferrous metal companies that have been immersed in the futures market for many years, the hedging of textile enterprises has received many lessons in this unprecedented wave of commodities.

reality

Cotton spinning enterprises have two fires in one year.

As the largest logistics distribution base for bulk commodities in the Yangtze River Delta region, there are a large number of imported cotton, PTA, wool, flax and other spot trading varieties to arrive in Zhangjiagang free trade zone every day.

On this side of the Yangtze River, reporters saw and heard the real situation of cotton and chemical fiber textile enterprises.

Mr. Jiang, director of the project of textile raw materials market in Zhangjiagang bonded area, goes all out to introduce cotton varieties and stocks, explaining a process from cotton to yarn.

Previously, reporters did not expect to unveil the "wounds" of textile enterprises.

Because in the past year, cotton and cotton yarns are really too hot.

In August 2010, a vice president of a textile enterprise in East China told reporters that "from 09 to September, the price of cotton and yarn has been rising. The market of textile enterprises has been very good. For some time, enterprises have even taken the initiative to raise prices for cotton yarn, which has not been seen in the past ten years. It belongs to an abnormal year."

With a phrase "thirty years Hedong, thirty years Hexi" to describe last year and this year's textile enterprises, perhaps some cruel.

But in the course of the inspection, the reporter heard the most is "this year's textile enterprise's life is not good."

In Zhangjiagang bonded area textile raw material industry chain research conference, many textile enterprises responsible person said that cotton prices rose from 9000 yuan in 2009 to 35000 yuan in February this year, and then fell from 35000 yuan to 25000 yuan.

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According to a group of agricultural products (000061) inspecting by Xin Hu futures in Jiangsu, it is revealed to reporters that about 30%-40% of small and medium-sized textile enterprises have been closed.

"Now we are losing money and losing our way.

Last year, the economic efficiency of the company was over 20%, and this year's economic benefits are zero.

A person in charge of textile enterprises who did not want to be named told reporters that "enterprises with economic strength can still support for a period of time, but small businesses without strength are bound to die."

Jiangsu Tian Ba group executive vice president Liu Shi Bo reluctantly regrets, "most textile enterprises can not go on, if the market does not improve in June, small businesses will not be able to endure."

He said that when the company started construction in March, business owners were very happy, but because of the lack of orders, insufficient funds and the sharp fall in cotton prices, the textile enterprises could not bear the high price of labour in the Yangtze River Delta region, especially in Suzhou.

"The days of textile enterprises are not very good now. Recently, textile enterprises in Heze are short of liquid capital and take up less and less goods. This market will continue for a long time.

Enterprises with larger scale will either spin or limit production.

And there is also a recent holiday forecast. The end of May and the beginning of June are the busy season.

Zawa Hirohito Industrial Development Co., Ltd. Zhang Huaiji also told reporters.

In May 26th, a Galaxy Hotel Summit on cotton spinning and weaving was held in Shanghai Galaxy Hotel, which is hundreds of miles away from Zhangjiagang.

Business representatives from all over the country are almost at the meeting. They are asking the same question: "what do you think of cotton?" and the answer is basically "not to say clearly, but not to see clearly."

A textile enterprise leader from Shijiazhuang, Hebei just arrived at Hongqiao airport and complained to reporters about the industry's dilemma.

"Shortage of funds, inventory accumulation for 2 months, and even some large businesses took the opportunity to malicious disk."

This person in charge said, fortunately, at the beginning of the year, "what orders are answered, what price is done?"

For some small and medium-sized enterprises, if the cotton price will rise at the beginning, for some low order orders, they will not take the initiative to pick up the stock and keep the high priced stocks.

Reason

Three factors cause textile enterprises to be injured.

Cotton is the raw material of textile enterprises. Shouldn't the raw material fall into a good way? Why would it cause a major loss for the enterprises?

"This is actually a misunderstanding," said Dong Shuzhi, manager of the cotton business department of Peking University Founder products group. Cotton starts from raw materials, first goes to cotton yarn, then goes to fabric, and then goes to the garment enterprises by printing and dyeing. Therefore, the textile industry is a "middle" industry.

As soon as we see the price of Cotton falling in the downstream, we will reduce the order for the upstream enterprises because of the "crowd mentality" of "buying up or not buying".

But the textile industry is also out of this mentality, will reduce the demand for cotton, resulting in cotton prices continue to decline, the wait-and-see sentiment of the downstream enterprises is more concentrated, so it will produce a "price cycle".

According to Liu Shibo, the company purchased 10 thousand tons of cotton last year, but this year it did not purchase.

Some people say, do not know whether the cotton will fall later; others say that enterprises seem to be brewing a collective bottom, when the influx of capital will raise cotton prices.

But everything is just speculation.

There are three reasons for the current predicament.

First is the failure of raw material procurement.

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"When the price of cotton rose in the early days, enterprises worried about the shortage of raw materials and rushed to buy cotton," Liu Shibo said. At that time, the average purchase cost could be more than 26000 yuan / ton.

Zhang Huaiji also told reporters, "textile enterprises most of the early stock has been consumed, very few part of the pre inventory, at that time the cost of 26000 yuan / ton.

According to the current cotton cost calculation, textile enterprises are only able to pay wages and electricity charges, and basically maintain balance and no profit.

In fact, the fluctuation of cotton prices is also counteracted by the price of downstream cotton yarn.

The price of cotton yarn has also dropped by more than 10 thousand yuan over the highest point, and its fluctuation range is more than that of cotton price.

Next is the huge.

According to the Research Report of a large and medium-sized textile enterprise in an authoritative organization, the cotton inventory and cotton yarn inventory of textile enterprises dropped slightly from last month (cotton inventory dropped from 61.9 days to 57.3 days, cotton yarn inventory dropped from 49.6 days to 44.3 days) in May this year.

The profit of cotton yarn production is from 169 yuan per ton to 286 yuan per ton, and some small factories are closed.

In terms of cotton varieties, the utilization rate of cotton was greatly reduced, from 36.5% to 19.3%, and the utilization rate of Xinjiang cotton and real estate cotton increased, indicating that the downstream consumption was not strong enough to make cotton yarn factories reluctant to use relatively expensive cotton instead of cheaper domestic cotton.