Cotton Textile Listed Companies Are In Urgent Need Of Export Because Of Severe Export Situation.

Recently, Hua Fu color spinning (002042.SZ) and black peony (600510.SH) were released in 2012. According to the two reports, Huafu color spun operating income in the first half of the year was 2 billion 791 million yuan, down 0.84% compared to the same period last year. Net profit was 51 million 178 thousand and 400 yuan, down 78.78% from the same period last year. In the reporting period, the business income of black peony was 1 billion 617 million yuan, a decrease of 0.98% over the same period.

Since last year's fall, cotton prices have been going downhill. In addition, the external demand is sluggish, and labor and raw material costs continue to rise. The order of cotton spinning enterprises is shifting and international competitiveness continues to decline.

Wang said that it is not only cotton spinning enterprises, chemical fibers, clothing Enterprises are in a state of decline or even loss, which is consistent with the background of the industry.

Cotton price downturn

The trend of cotton prices has a direct impact on the profitability of cotton textile enterprises. Cotton prices are sluggish, and the prices of cotton spinning enterprises have to drop substantially, resulting in serious economic impact. Since last year's fall, cotton has been going down the road. In the first half of 2012, cotton price continued the decline of the roller coaster market, from 20000 yuan / ton down to June 30th, cotton price was around 18500 yuan / ton. According to the business monitoring data, by the end of 7, the price of 3A grade real estate cotton was around 18300 yuan / ton, and the cotton price was 19900 yuan / ton in the same period last year. The price difference between home and abroad has helped to push down further cotton prices. "Even if there is a high tariff import of cotton, foreign cotton prices will still be lower than domestic cotton prices in the domestic market, and the quality of local cotton will generally be higher. More enterprises will choose imported cotton or choose high-quality Xinjiang cotton, and the transportation problem of the Xinjiang cotton has been highlighted. The demand for cotton varieties in the market is very small, and the cotton which is not willing to cotton is a large quantity of stock, and the backlog is difficult to come out. Chen Changsong said that as of the end of 7, cotton prices at home and abroad amounted to about 4500 yuan / ton.

6 in late July and early July, the cotton spot market, which had been down for a single month after more than a month, finally ushered in a long bounce. Chen Changsong told the "daily economic news": "the lowest cotton price this year reached 18 thousand yuan per ton, the market has eased since the two quarter, and cotton market remained stable in July, but the price range still fell at 18 thousand, and the market was desolate."

In July, for cotton prices to pick up slightly, there are people in the industry who believe that there is little room for cotton prices to fall in the future. The steady rise of cotton prices in the second half of the year will lead to a rebound in corporate profits, and the situation of cotton spinning enterprises will be reversed. Chen Changsong believes that the rise in July, as long as the consumer market's short recovery, is part of the adjustment, the whole industry can not play a big supporting role. In the short term, or will continue for a short time to warm up, then the city will continue to be weak. "Freezing three feet is not a cold day."

The export situation is grim.

"The biggest problem facing enterprises now is the fact that products can not be sold out and inventory is relatively high, and the whole industry chain is facing high inventory situation." Wang Qian said. He believes that the cotton industry needs to face more than just cotton prices, and more importantly, terminal demand. As an intermediate link, the final consumption demand of cotton spinning enterprises depends on terminal consumption, and terminal consumption will eventually reflect the consumption of upstream raw materials. "If demand is good, even if the price of cotton is high, the market can digest."

Since the beginning of this year, the main export markets in Europe and the United States have been constantly in crisis. The sluggish international demand has seriously affected the economic situation of various countries and the boom of the cotton textile industry. Under such circumstances, domestic cotton prices continue to decline, and the price of colored spun yarn is also declining.

According to statistics, in the first half of this year, China's exports of textile raw materials and products amounted to 110 billion 70 million US dollars, an increase of 0.9% over the same period last year, down 25.8 percentage points from the 26.7% growth rate of the same period last year. Clothing and accessories products exported $81 billion 490 million, an increase of 2.6% over the same period last year, down 19.7 percentage points from the same period last year.

"The downturn in international demand has made the export situation of cotton textile products very severe in China, and the sales volume of some enterprises has shrunk dramatically." Song Jiening, a researcher on agriculture, forestry, animal husbandry and Fisheries of China investment adviser, said.

Cotton prices are sluggish and demand is sluggish, affecting product prices, labor costs and rising prices of raw materials.

Song Jiening told reporters that for a long time, our country has very strong advantages in the cost of cheap labor. Therefore, some enterprises lacking in foresight sense have not put more resources into the improvement of technology and management level while obtaining high profits. "Nowadays, with the gradual disappearance of demographic dividend, the production and operation of enterprises is difficult."

In recent years, domestic labor force has been rising. "Before Adidas moved to China's last direct factory, it showed the problem." Chen Changsong told reporters.

"Liquefied petroleum gas and diesel are all the energy used by textile machinery. In July, the two prices rose by 17.71% and 4.06% respectively." On the other hand, Chen Changsong added this factor to the rising cost.

Domestic labor costs continue to rise. At the same time, because of the low cotton prices of raw materials, many orders of cotton spinning enterprises have been transferred. Under such circumstances, cotton spinning enterprises are not good enough to survive.

In its announcement, Baron pointed out that some customers transfer orders to countries with certain price competitiveness in Southeast Asia, which is a major reason for their performance losses.

However, Wang Qian told reporters that the cost of labor in the domestic textile industry has increased rapidly, and that low-end products and Southeast Asian countries certainly do not have the advantage. Gradually shifting out is also a great advantage. "Enterprises must not always be in the low end, because there is basically no room for development. Compared with other countries such as Southeast Asia, our high-end market still has considerable competitiveness.

"It is expected that the bad situation of cotton spinning enterprises will continue in the second half of this year, and the export situation of textile will still be very grim, and the overall efficiency of the industry will decline further than in the first half of the year." Song Jiening said. {page_break}

Controlling costs becomes a short-term solution

The peripheral economic environment is sluggish, and there are many problems such as rising costs and falling demand. Cotton spinning enterprises must find a way out for themselves, otherwise they will only be closed down.

"In the current situation, if the enterprises can only improve their capabilities and support policies, the government will certainly measure the interests of all parties." Wang Qian said.

Some industries have called for policies to increase quotas to ease the pressure on cotton prices faced by businesses. But the government's quota for cotton distribution needs to balance the protection of domestic cotton industry and cotton spinning enterprises. "Excessive quotas will cause great harm to domestic cotton. After all, the price difference between cotton and cotton is very big." Wang Qian said.

Chen Changsong believes that in such a thorny situation, industrial transfer, improve product technology is particularly important. "Enterprises need to start with high technology, increase the research and development of new products, and improve the quality and quality of products. But this bottleneck is hard to break through, and we all know that, but the key is not implemented by every enterprise.

"Enterprises need to make short-term and long-term plans. The medium and long term will surely be upgrading and transformation of the industry, improving the quality and grade of products. In the short term, in a very bad external environment, enterprises must consider as much as possible to reduce costs. Wang finally pointed out this.

In this way, the only way the enterprises can do is to control the cost. And compression costs are naturally linked to technology research and development. Song Jiening believes that in order to alleviate the pressure brought by the cost increase of enterprises, we need to invest more in technology research and development to improve production efficiency. Secondly, enterprises need to develop their innovative thinking ability, actively develop high value-added derivatives, and improve their profit margins. He said that widening market channels, selling more products to Africa, South America and other regions, and gradually getting rid of the risks brought by the market unitary nature were also a clear path for the follow-up workers of cotton spinning enterprises to survive.

"Now many enterprises simply stop production and go out of business. A large number of weaker enterprises will be closed down, especially those based on export and foreign trade. Chen Changsong finally said so.

"The fundamental improvement of the whole industry may have to wait until the international economic recovery is more stable and clearer, or the industry transformation will achieve some success." Song Jiening said.