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    After The Epidemic Situation, Hubei Province, A Major Cotton Textile Province, Is Facing Production And Marketing Pressure. How To Save Itself?

    2020/8/25 12:01:00 80

    Epidemic SituationCotton SpinningProduction And MarketingPressure

    Hubei is a major cotton textile industry province in China. According to the application information data of textile enterprises issued by the economic and Trade Department of the national development and Reform Commission, the textile scale of Hubei Province in 2018 was close to 6 million spindles, the annual consumption of cotton exceeded 610000 tons, and the annual output of pure cotton yarn was close to 520000 tons, ranking the fifth in the country.

    As the epicenter of the epidemic, the social production and living order in Hubei Province has been completely restored to normal, but the local cotton textile enterprises are still facing greater production and marketing pressure, and some enterprises are in the dilemma of production reduction and production suspension, and the overall situation is not optimistic. In the face of difficulties, how do Hubei Textile enterprises save themselves and how to treat the trend of cotton price?

    Market downturn, insufficient orders

    Spinning enterprises to survive

    The spinning scale in Zaoyang, Hubei Province ranges from 700000 spindles to 1 million spindles. Most of them are small-sized enterprises, mainly producing medium and low-end yarns. Due to the impact of the epidemic situation, the overall operating rate of the enterprises has declined. From the perspective of raw material and product inventory, the cotton inventory of spinning enterprises was maintained at a normal level for about 1.5 months on average. Cotton yarn inventory showed signs of accumulation, which was at a high level compared with previous years. The main reason was that there were few downstream orders and high sales pressure.

    A local enterprise with a scale of 30000 spindles said that since the resumption of production on March 14, the factory has been maintaining a 100% operating rate. In order to meet the current domestic market demand, it mainly produces combed 32S, 26S and other yarns. At present, the lint warehouse of the enterprise has existed for about two and a half months, which is basically the same as that of the same period last year, with an average monthly yarn output of 400 tons. Affected by the global epidemic situation and other factors, cotton yarn sales were hindered, and the inventory of finished products increased. Therefore, the company has expanded the sales market from Guangdong to Zhejiang to reduce the current pressure on cotton yarn inventory. It is understood that the enterprise mainly uses "double 29" Xinjiang machine to pick cotton, with the purchase price of 12350 yuan / ton ~ 12400 yuan / ton, while the sales price of cotton yarn is 19750 yuan / ton, so the product profit is limited.

    "During the epidemic period, the speed of resumption of work and production in Hubei was slower than that in other areas of China, and the production and operation of enterprises did not fully return to normal until April. However, the rapid spread of the epidemic situation abroad made the situation of foreign trade orders more and more serious. Not only did a large number of foreign trade orders break the contract, but also the new orders were seriously insufficient, and the sales of enterprises were under great pressure. When the epidemic was at its worst, Hubei cotton yarn was rejected in other parts of the country A Hubei spinning enterprise boss said.

    The market downturn, enterprises have to adapt to survive. A person in charge of a textile enterprise in Wuhan said that in the past few years, the enterprise launched into the middle and high-end cotton yarn Market and purchased the world's advanced cotton yarn production equipment, mainly producing combed 80s and 100s yarns. The main reason is that the enterprise does not have an advantage in the low-end yarn market, and the production of high-value-added products is the core and direction of development. However, the sudden outbreak of the epidemic has disrupted the pace of development of the enterprise. Restricted by foreign trade and export, the high-end yarn market has fallen sharply, so it can only develop the domestic medium and low-end market. "The production equipment worth tens of millions of yuan to produce 40 combed and other middle end yarns is really overkill." The person in charge of the enterprise said.

    However, it is not easy to enter the domestic low-end market. According to the introduction of enterprises, foreign trade orders are mainly high-end yarn, and domestic market is mainly low-end yarn. Affected by the epidemic situation in foreign countries, enterprise orders are mainly for the domestic market. As a result of the high-end production in the domestic market, some enterprises have been faced with the pressure of maintaining the stability of the domestic production market due to the heavy pressure of domestic production.

    Cotton price fluctuates slightly

    Import cotton no longer has advantages

    Although the epidemic situation led to the overall depression of the textile market, the business situation of cotton trading enterprises in Hubei was better than expected.

    The head of a trade enterprise in Hubei said that most of the local textile enterprises bought high price lint for production years ago. Due to the epidemic situation, cotton prices dropped sharply and orders decreased, and some enterprises were facing great business pressure. However, since the resumption of work and production in April, the enterprise has been operating well, and the overall impact of the enterprise is small.

    According to the person in charge of the enterprise, during the off-season period of the industry, the enterprise's operation was better than expected, mainly due to the following three reasons: first, cotton prices have been relatively stable since April this year, and textile enterprises have less impact on cotton trade and sales are even better than the same period last year; second, the price difference between domestic and foreign cotton is small, and textile enterprises give priority to domestic cotton in raw material procurement. It is understood that the current price of lint in China is about 12000 yuan / ton, while the price of Indian cotton transported to Hubei is 11800 yuan / ton. Compared with domestic cotton with similar quality, the price advantage of imported cotton is not obvious; Third, some enterprises which are greatly affected by the epidemic situation have difficulties in financing. The cotton reserves effectively alleviate the financial pressure on the production of enterprises. In addition, the blockade and control in Xinjiang have hindered the transportation of cotton in Xinjiang, which has accelerated the cotton sales in the inland warehouses.

    It is understood that the enterprise's raw material procurement mainly adopts the "sales order" mode, fixed-point procurement, fixed-point sales, select some cotton in line with the enterprise customer group indicators, reduce the enterprise procurement risk from the source. At the same time, the enterprise from the source of procurement to later sales, the implementation of staff responsibility system, greatly reducing the business risk of the enterprise, so as to ensure the normal operation of the enterprise.

    According to the analysis of insiders, reviewing the cotton price this year, the vibration range of zhengmian in the first three months of 2009 contract basically maintained at 11000 yuan / ton ~ 12500 yuan / ton, which provided a good opportunity for the development of cotton textile industry. Upstream raw material market stability, virtually for downstream processing products to provide protection. Trading enterprises said that chemical fiber prices have been greatly affected by fluctuations in crude oil prices, while cotton prices are relatively stable. Although the price of pure cotton yarn has declined slightly due to the impact of market supply and demand, textile enterprises can digest it through production processes. In addition, the price difference between domestic and foreign cotton was narrowed, and textile enterprises preferred domestic cotton in raw material procurement, which played a role in supporting domestic cotton price to a certain extent.

    In view of the late cotton price trend, Hubei enterprises believe that the current cotton price is in the situation of "bottom down, top top", but have different views on the top space. In the period of economic and trade, the relationship between China and the United States is still in a period of difficult economic and trade situation. Although the current situation of the cotton textile industry is grim, the industry insiders are relatively optimistic about the price trend next year, and are still full of confidence in the future development of the cotton textile industry.

    Spinning enterprises, which mainly export products, believe that it is not easy to convert export to domestic sales. Traditional enterprises, which have been deeply rooted in the domestic market, have maintained stable orders and full production capacity due to their stable customer relationship.

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