Cotton Prices In A Downturn, Textile Enterprises Declining Situation Is Hard To Reverse In The Near Future

Cotton prices are sluggish, demand is sluggish, cotton

The chain is experiencing the lowest level in recent years.

In the first half of the year, enterprises generally fell into losses, switched production and stopped production.

According to the relevant state departments jointly issued the "2012 cotton temporary storage and purchase plan", the purchase and storage will start this week.

The industry believes that cotton prices are expected to be stimulated in the short term.

The price of temporary cotton storage and purchase is 20400 yuan / ton, which is 600 yuan higher than that in 2011.

The sale price is 18500 yuan / ton of standard grade cotton. In order to prevent scalping, the price limit can only be purchased by textile enterprises, and the quantity of cotton purchased by each enterprise does not exceed 1 months.

As a matter of fact, since September 3rd, the China Cotton Reserve Management Corporation (hereinafter referred to as "China cotton reserve") has begun to put some cotton reserves in the national cotton trading market.

According to the inspection, from September 3rd to September 7th, the list of "the list of textile enterprises and the number of bidders bought and sold in 2012" has been distributed to the tenth batch, with a total turnover of more than 140 thousand tons of cotton.

Although the policy side hopes to pull cotton prices, but because of cotton throwing storage and storage at the same time, and domestic and foreign cotton price difference of up to 4000 yuan / ton, therefore, in the long term, cotton price rise still exists pressure.

The current cotton price is less than 19000 yuan / ton, and there is still a certain gap between the 20400 yuan / ton storage and storage price.

In addition to price, as an intermediate link.

Enterprises also have to face the downturn of terminal demand.

Terminal consumption will eventually reflect the consumption of upstream raw materials.

Wang said that the biggest problem is that products can not be sold, and the whole industry chain is in a state of high inventory.

For the textile industry, gross profit margins generally do not exceed 5%.

Under this situation, the market share will be lost if the price rises.

In the first half of this year, China's largest cotton spinning enterprise, 02698.HK, dropped just 58.8% in the first half of the report, and net profit of its parent company decreased by about 90.1% compared with the same period last year.

Similarly, a sizeable new yarn manufacturer and supplier, 002042.SZ, had a business income of 2 billion 791 million yuan in the first half of the year, down 0.84% from the same period last year, and net profit of 51 million 178 thousand and 400 yuan, down 78.78% from the same period last year.

Xu Ping, a person in charge of a textile enterprise in Changshou City, told reporters that the price is not going to go, the order quantity is also very few. The company's production line only dare to open 1/3.

"For small businesses whose financial strength is not strong enough, they have ceased production."

For the purchase and storage, Xu Ping said, "short-term cotton prices will rise a bit, a few hundred dollars, it is impossible to increase too much."

Because, embarrassing, because cotton price has not yet been in line with international standards, domestic cotton prices are much higher than foreign countries, resulting in domestic enterprises' production costs more than foreign countries, and exports have declined sharply.

However, for powerful enterprises, they choose curve to make a living.

For example, the Shandong Ruyi group (000626, stock bar), which claims to have the largest domestic wool textile industry chain and the cotton textile printing and dyeing industry chain, directly turns its vision to overseas. It is working with Lempriere Pty Ltd, Australia's Australian wool processing enterprise, to negotiate with 230 million Australian yuan (1 billion 500 million yuan) to purchase the largest cotton company, the cotton production base.

Insiders say that if the acquisition is really successful, it can really save a lot of raw material costs for enterprises.

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However, many industry people are still worried about the long-term situation of the cotton market. "Because the supply of cotton in China is far larger than consumption, even the bottom of the market can not achieve the desired effect."

Hongye futures report also shows that "the possibility of global economic recovery is almost zero, and the textile industry's demand for cotton is hard to increase effectively.

Based on the judgment that the domestic supply and demand relationship is difficult to reverse, the futures price will soon return to the 20400 yuan / ton storage price. "