Textile Enterprises: High Inventory Endangers Survival Yarn Stability And Dark Fall

Recently, the domestic cotton and grey fabric market is still weak, and the yarn as an intermediate link is also dominated by weak adjustment. Many textile factory executives said that the yarn remained low and stable, with fewer orders and higher capital pressure.

The upstream cotton market is down and down. According to a market source, as of December 3rd, Xinjiang's lint quotations continued to fall. Akesu area "double 28" picking cotton picking price at 13100-13300 yuan / ton (public fixed), "double 29" picking cotton picking price at 13300-13500 yuan / ton, compared with the previous week price fell 100 yuan / ton.

Talking about the reasons for the decline in cotton prices, the manufacturers are summed up as follows: first, Zheng cotton stumbled. As of 3 days, Zheng cotton main contract 2005, contract prices fell, the highest reported 13165 yuan / ton, the lowest reported 12925 yuan / ton; closing price 12995 yuan / ton, compared with the previous trading day price fell 1.22%, 431240 hands trading volume, 656374 hands. Two is the cost of cotton. Cotton seeds continued to rise in Xinjiang recently. As of 3 days, cotton seeds in Akesu, Kashi and other places were quoted at 2.00-2.05 yuan / kg, up 0.02 yuan / kg compared with the previous week. Cottonseed rose, reducing the cost of lint. Three, it is difficult to sell lint, and vicious competition is fierce. A lot of Xinjiang enterprises feedback, although Xinjiang cotton has good storage and profit, but the benefits are limited, and lint is still not sold. In order to get rid of inventory, the price war between manufacturers is very fierce, while the cost is falling, the selling price is also pulled down.

The downstream textile enterprises are facing multiple pressures, and this year's vacation time is ahead of schedule or foregone conclusion. According to some grey cloth manufacturers in the mainland, due to the reduction of orders, it is impossible to maintain normal production. Many manufacturers advance their vacation time to the first half of 12. Even some individual enterprises have been on vacation since the beginning of December, and the commencement date has been postponed to March 2020. The vacation time has lasted for 3 months.

According to the analysis, there are two reasons for the early holiday of grey cloth manufacturers this year:

First, high inventory endangers the survival of enterprises. Many manufacturers in Jiangsu and Zhejiang, Hebei and Shandong indicated that due to the unlimited expansion of capacity and the reduction of orders, many manufacturers' inventories hit a record high. On the 3 day, a factory owner in Zhejiang said that the sales volume of the factory in the past year was around 3 million yuan, but this year it was only about 1000000. At present, the stock has reached more than 190 million meters. High inventories force manufacturers to reduce their pressure in advance.

Second, the prospects for Sino US trade are not optimistic, and the wait-and-see sentiment of the industry is rather strong. I understand that many manufacturers say that the reason for the sharp reduction in orders this year is due to the Sino US trade war. Many overseas orders are cancelled due to tariff reasons, while some orders are not exported to the US, but terminal customers are American. The long-term and uncertainty of Sino US trade war has brought pressure to the grey fabric enterprises.

Therefore, the weakening of the upstream and downstream market has made it difficult to change the weakness of the yarn recently. The main findings are as follows:

First, the order is insufficient, the enterprise stock rises. A large number of manufacturers in Jiangsu, Zhejiang and Hebei have indicated that since November, orders for conventional yarn and some high count yarn have been reduced, and the stock of large factories has increased to 20-25 days. Although some small factories are "producing by orders", inventory has increased to more than 15 days because of long time no order.

Two, low end products are more competitive, and prices are stable and dark. 4 early in the morning, the owner of a factory in Tangshan, Hebei said that the factory today lowered the price of OE12S, OE16S and combs 21S by 100 yuan / ton. If the price of large quantities can be collected, it can still be discussed. On the same day, the factory OE12S quoted 13100 yuan / ton, OE16S quoted 13400 yuan / ton, and the combed 21S quoted 19200 yuan / ton.

Although many manufacturers do not have a clear cut price information, but actually clinch a deal, manufacturers have 100 yuan / ton profit. The yarn is generally stable and dark.

To sum up, under the influence of multiple negative effects, yarn upstream and downstream are stagnant, and inventory decompression and vacation decompression become the mainstream behavior of enterprises. With the approaching of the end of the year, more and more enterprises will go on holiday, and will continue to have a negative impact on the market at the end of this year.