Textile Enterprises: Cotton Price Decline Is Hard To Reverse In The Near Future

Cotton prices are sluggish and demand is sluggish.

The chain is encountering the lowest level in recent years, and textile enterprises generally fall into losses in the first half of the year.

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.

The reporter found that from September 3rd to September 7th, 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 reserves.

Reporter analysis, although the policy side hopes to pull cotton prices, but because of

At the same time, the difference between domestic and foreign cotton price is as high as 4000 yuan / ton. Therefore, in the long run, cotton price rise still has 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.

Besides price, cotton spinning enterprises, as the middle part, have to face the low end 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, Huafu color spinning (002042) (002042.SZ), has been operating at 2 billion 791 million yuan in the first half of the year, down 0.84% from the same period last year. Net profit was 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,

Far higher than foreign countries, the cost of production of domestic enterprises is also greater than that of foreign countries, and exports have declined sharply.

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

For example, the Shandong Ruyi (002193) group, 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 LemprierePtyLtd, an Australian wool processing enterprise, to purchase the largest cotton company, the cotton production base of the largest cotton company, with a 230 million Australian dollar (about 1 billion 500 million yuan).

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

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 domestic supply and demand relationship is difficult to reverse the judgement, futures prices will soon return to 20400 yuan / ton of storage price doubts.