Cotton Yarn Prices Fell To Cost Line Cotton Textile Enterprises Ahead Of Winter

Cotton prices

"Compared with last year, cotton prices did drop a lot, but

Mr. Ho said that the current situation of spinning pure cotton enterprises is rather difficult, and the situation of spinning polyester cotton enterprises is more difficult. Some local enterprises have begun to limit production and reduce losses.

Yesterday (November 9th), the China reserve cotton Management Corporation (hereinafter referred to as "China store cotton") wrote on the website of the SASAC website. Recently, downstream consumption has not been improved, the yarn and cloth inventory of enterprises has increased, funds have been tightened, the pressure of enterprises to reduce prices and promotions has been great, and the price of cotton yarn has continued to decline. The price of polyester staple fiber has dropped significantly, due to the fall in the price of upstream PTA.

Textile enterprises started to lower the rate, raw material procurement was weak, and domestic cotton prices fell slightly.

Cotton price roller coaster

Since January this year, the domestic cotton price has been inverted "V".

China's cotton price index rose from 27516 yuan / ton in January 4th to 31241 yuan / ton in March 8th.

Since then, "the wind and cloud have changed", cotton prices have plunged rapidly, in April 2nd, 29852 yuan / ton, and in June 14th cotton prices fell to 24551 yuan / ton.

Yesterday (November 9th), China's cotton price index (CCIndex328) has plummeted to 19271 yuan / ton.

In addition, publicly available data show that cotton production will reach 7 million 380 thousand tons this year, an increase of 10.9% over the previous year.

According to common sense, cotton harvest is good news for cotton farmers, cotton enterprises and textile enterprises. However, in the cotton industry chain, strong wait-and-see sentiment is permeated.

"At the beginning of the year, cotton was not only very expensive but also very tight. At that time, our company also sent someone to Xinjiang to buy cotton."

Mr Ho said that cotton traders are now rushing to sell cotton to textile mills.

"Because of the tight funding and the expected cotton prices will not rise substantially in the near future, we are more cautious when purchasing cotton, and basically buy as much as we want."

Mr Ho said that their company did not hoard cotton because of the low price of cotton.

In Mr. Ho's view, the change in cotton prices this year is unpredictable. Most of the cotton hoarding enterprises in the early stage have suffered heavy losses, and many enterprises have been afraid of frying cotton.

"Cotton prices rose last year, cotton growers got substantial benefits, planting area increased significantly, planting intention was strong, but cotton harvest cotton farmers reluctant to sell mentality is heavier, while cotton enterprises purchase intention is not strong, lower prices, cotton trading market is mainly stable."

Speaking in an interview with the daily economic news reporter, Xiong Quan, an analyst at the Orient economist, said yesterday that in October, with the massive listing of seed cotton, seed cotton prices continued to decline, and the European and American economic downturn continued to maintain low demand for textile enterprises, and the price of lint cotton was facing greater upward pressure.

Zhu Qinghua, a consultant at CIC, said that cotton farmers had higher psychological expectations for cotton prices this year. Many cotton farmers said they were not selling 4.5 yuan / Jin, but they were reluctant to sell.

Cotton yarn volume and price down

In November 9th, China store cotton said that in November 4th, the price of 32 cotton combed yarn was 26870 yuan / ton, down 200 yuan / ton last week, or 0.7%, and the polyester staple price was 11950 yuan / ton, down 550 yuan / ton last week, or 4.4%.

The average price of the 3 grade seed cotton purchase in the mainland is 4.11 yuan / kg (the price of cotton seed purchase is 18210 yuan / ton), down 0.05 yuan / Jin, or 1.2%, compared with last week. The average purchase price of 3 seed cotton in Xinjiang is 4.14 yuan / jin (the price of the cotton seed is 18267 yuan / ton), down by 0.06 yuan per kilogram, or 1.4% percent.

The national cotton price B index, which represents the average selling price of lint cotton in the mainland, is 19316 yuan / ton, down 129 yuan / ton compared with last week, or 0.7%, and the average price of Xinjiang standard lint sale is 19637 yuan / ton, down 116 yuan / ton, or 0.6% lower than last week.

Zhengzhou cotton futures contract settlement price of 19345 yuan / ton in November, down 135 yuan / ton, or 0.7%, compared with last week; the average price of electronic matching November of the national cotton trading market was 18883 yuan / ton, down 204 yuan / ton, or 1.1%.

"The price of cotton yarn has fallen so much that it is now approaching the cost line."

Mr. He said that if the price of cotton yarn continued to fall, the company could only face the embarrassment of loss.

Mr. Ho said that when cotton prices were at a high level, some textile enterprises reduced the amount of pure cotton yarn and increased the amount of textile made of polyester cotton and chemical fiber in order to reduce financial pressure.

At present, the sale of polyester cotton has dropped sharply, and some enterprises have serious inventory.

"Now these enterprises are still more sad than we are, and some textile mills are beginning to stop production and reduce losses."

Bear wide said that when cotton prices were at a high level, chemical fibers became a substitute for cotton for a time.

At present, the price of cotton is at a low level. At the present stage, the supply of cotton is abundant, which leads to a strong desire to increase cotton blending ratio in textile processing industry, so the substitution effect of chemical fiber decreases.

Bear wide said, according to his understanding, since October, the loss and stop production of textile enterprises gradually increased.

"At present, the production and marketing of China's textile industry is in a doldrums. Sales of yarn and cloth are weak, and finished product inventory is picking up. The phenomenon of increasing production and limiting production is difficult to enlarge."

In addition, recently, domestic storage and storage volume has even reached a new high, and cotton enterprises' enthusiasm for storage has increased significantly, which is also a reflection of the weak demand for cotton in the lower reaches.

As domestic consumption and cotton demand are hard to pick up quickly, cotton spot prices are expected to weaken further.

The International Cotton Advisory Committee (ICAC) released the November Global Forecast of global production and demand. It is estimated that the global cotton consumption in November will be 24 million 600 thousand tons, down 120 thousand tons from last month.

This year, global production exceeds consumption by 2 million 300 thousand tons, and inventory consumption is expected to rise to 55%.

The recent US cotton export report shows that in the week of 21-27 October 2011, the net volume of US cotton exports in the 2011/12 year was 20 thousand and 900 tons, down 66 thousand and 400 tons compared with last week.

In the recent G20 group summit, leaders of various countries failed to agree on the plan to solve the European debt crisis through the International Monetary Fund (IMF). The euro zone debt crisis problem has not yet been solved, and market confidence is hard to recover. With the full supply of cotton, the pressure on international cotton prices has continued to pressure. Cotton prices are still hard to shake off the weak trend, and the weak oscillation is expected to remain weak in the near future.