After The Import Yarn Is Stabilized, Cotton Textile Industry Is Getting Warmer?

As the saying goes, "after the Laba is the year". Today is the thirteen of the twelfth lunar month, and many textile enterprises have entered the ending stage of the Lunar New Year's work. As of yesterday, the domestic C32S average price closed at 22995 yuan / ton, below 23000 yuan / ton mark, so far, compared to the middle of September last year high price 24350 yuan / ton, fell by nearly 5.5 percentage points. But fortunately, the Sino US trade negotiations, which will be held at the end of January, have released a good signal. According to foreign media reports, the United States is considering cancelling and lowering Chinese tariffs. Of course, the information has not yet been officially recognized, so the market still wants to see progress in the two countries' negotiations. Affected by this, the pain in the early stages of the textile industry is also gradually easing.

The performance of the upstream cotton market has improved. Since the beginning of the twelfth lunar month, the number of cotton spot transactions has increased in many parts of the country. Many textile enterprises said that although it is not yet clear whether they can usher in a turning point after the year, they still need a small amount of supplementary materials to prepare for the start of the festival. Especially in the low position of Zheng cotton, many spinning enterprises use "point price" to connect warehouse receipt to replenishment. According to the national cotton market monitoring system, the survey of purchasing intentions in early January showed that 64.6% of the enterprises preparing to purchase cotton, down 6.6 percentage points compared with the same period last year, accounting for 30.5% of the wait-and-see attitude, up 4.1 percentage points from the same period last year. The yarn production and sales rate of the enterprises surveyed was 92.6%, down 1.8 percentage points year-on-year, and the inventory was 19.8 days, up 1.3 days compared with the same period last year. Cloth production and sales rate was 96.9%, up 6.2 percentage points year-on-year; inventory for 32.2 days sales, down 12.7 days. At present, the two major expenditure items of the factory are labor and electricity charges. Because sales are not smooth, the repayment is limited, and the start-up is more than the loss. Therefore, early vacation is also a way to reduce losses. At the same time, due to the low volume of orders before and after the Spring Festival, all factories are making every effort to increase the money back to ensure the smooth start of the festival. Many entrepreneurs believe that as long as they manage well, there will be opportunities in the future. A cotton trader also said that the cotton trade was difficult to make in 2018, and this year is going to contract the spinning mill.

The price of imported yarn also stabilized. As of January 17th, the spot price of FCY Index C32S was 22884 yuan / ton, compared with last week's 8 yuan / ton increase. Traders' inventory pressure has been reduced, and the output of the warehouse has also picked up slightly. Recently, the appreciation of the RMB against the US dollar on the shore has risen sharply, and Ben Zhou Shengchao has broken the 6.75 pass since July 2018, hitting a new high since July 2018. Due to the strength of the renminbi and the reduction of resource costs in late port, the expected profit will continue to rise. Traders' losses will be well restored. If the RMB continues to strengthen, traders will probably lose their profits.

On the whole, the Lunar New Year is coming to an end, and the textile industry in spring will also drive the demand for the peak season. The Sino US trade negotiations will soon respond to the market. In addition to the formal implementation of CPTPP in Vietnam, the Southeast Asian countries, such as Kampuchea, Bangladesh and India, have recently had frequent strikes, making their competitiveness in the international arena declining. The external environment is changeable, and cotton spinning production may not be pessimistic after the beginning of spring.