The Price Of Cotton Yarn Is In A Dilemma

Last week cotton yarn futures high fall, this week continued the downward trend. As of March 12, 2021, cy c32s pure cotton yarn was reported to be 25430 yuan / ton, down 440 yuan / ton or 1.70% compared with the same period last week.

This week, Zheng cotton fell again. This time, it not only broke 16000 again, but also nearly exceeded 15500. As of yesterday, the main cotton 2105 contract closed at 15790 yuan / T, which experienced a slight correction at 15550 the previous day. But this time, cotton processing enterprises and traders are relatively calm, and ginning plants are reluctant to sell. Because they are worried that Zheng cotton will fluctuate violently in the short term, a large number of Cotton Traders and futures companies reduce or postpone the basis purchase, and instead increase the "arbitrage" operation. Compared with cf2105 contract delivery, it not only improves profits, but also reduces transportation, transaction delivery and other troubles At the same time, the payment will be collected two to three months in advance. From the perspective of spinning enterprise's cotton yarn processing profit, due to the early cotton yarn "overtaking in the curve", and the price drop is obviously less than that of raw materials, the current profit has reached 2300-2500, and such a high profit has even reached a historical high. Since March, textile enterprises have purchased a large number of raw materials, making the cotton inventory of textile enterprises reach a three-year high. At the same time, Zheng cotton has fallen sharply and cotton yarn is in a dilemma.

Affected by the fall of Zheng cotton last week, cotton yarn Market shipment significantly slowed down from last week. However, due to the fact that most textile enterprises still have orders in their hands, and there are also many orders to April to may, most textile enterprises mainly wait-and-see, and the quotations are stable, and some of them are on the high side, and the quotations are lowered. On the other hand, if the yarn price is adjusted downward by a large margin, there will be many problems. First, many textile enterprises have just raised the ex factory price of cotton yarn one after another from late February to the beginning of March, and then dropped sharply in a few days, which may be difficult for customers to accept and need repeated communication and negotiation; second, if the price of yarn is reduced by more than 500 yuan / ton, orders received after the Spring Festival will be difficult to implement, and the probability of default of downstream fabric factories, clothing enterprises and foreign trade companies will increase significantly. The person in charge of a cotton mill in Shandong said that before and after the Spring Festival, the plate price of cf2105 contract increased from 14735 to 17080, up 2345 points. With such a big fluctuation, the cotton mill simply has no ability and no profit space to digest, so it can only follow Zheng Mian to raise the quotation substantially. In the final analysis, the participation of cotton yarn futures is not high and the attention is too low. Textile enterprises do not have hedging tools like Zheng cotton. Therefore, they are basically "spot to spot". As soon as there is "wind blowing and grass moving", cotton yarn can only "dance with flowers".

As of March 11, all cotton grey fabric CG C32 closed at 6.08 yuan / m. although there was a decrease over the previous week, the increase since March was greater than that of cotton yarn. For the weaving factory, looking at the upstream is like watching a big play, "watching him rise to Zhu Lou, watching him feast guests, watching his building collapse.". After the festival, the raw materials have been increased by 1500 yuan / ton. Fortunately, most of the textile mills have sufficient stock of raw materials, and the customers who just need to purchase them are sporadic and wait-and-see.

In February, the RMB exchange rate fluctuated in an interval, which had little impact on the settlement of imported yarn. However, in the early March, the exchange rate showed a slight depreciation trend, which was not conducive to the import yarn, and the settlement cost increased. In terms of price, due to the sharp fall in yarn price this week, the yarn inside and outside is hanging upside down. As of the 11th, the FCY index c32s closed at 25880 yuan / ton, down 91 yuan / ton last week. In addition, the operating rate of downstream weaving mills is low, the newly added purchase quantity is limited, and traders send more old orders after pre-sale in the early stage, so the actual import yarn inventory is still at a low level. It is worth mentioning that in recent days, Pakistan's media continue to release news that the shortage of cotton yarn raw materials is further aggravated due to the entering of the peak consumption season and the transfer of orders. The textile industry chain has been putting pressure on the Pakistani government to allow the import of cotton yarn produced in India to alleviate the shortage of local cotton yarn supply. The all Pakistan cotton power loom Association (apcpla) requires the government to ensure that imported yarn is fully duty-free. On March 3, Abdul Razak Dawood, former Minister of Commerce of Pakistan and now a business adviser to the government, said on social media that "the prime minister is worried about the shortage and the rise of cotton yarn prices, and instructed to take necessary measures, including cross-border trade of cotton yarn, to maintain the momentum of value-added exports." Since the Chinese new year, the price of Indian cotton yarn has continued to rise. Although China's demand for Indian yarn has been weakened due to the high price in the near future, if Pakistan allows the import of Indian yarn, the Pakistan market will help India digest part of its production capacity. The export of Indian yarn, which had been slightly slowed down, will once again be better, and the demand for Indian yarn will increase by a certain extent. The local cotton mills in India may suffer from the shortage of production capacity, and the shipping schedule may be further extended Late. This may become the next factor to support the price of printed yarn.