The Turnover Of Reserve Cotton Is Light, And Cotton Spinning Enterprises Seek Adjustment Direction In The Predicament

On August 16, 6000 tons of cotton was put into the market by the central reserve, but no transaction was made. This has been five consecutive no transactions since the launch of the annual reserve cotton rotation in Japan on July 13. The light market trading reflects the downturn of cotton industry chain from one side.

Since this year, with the changes in the epidemic situation, geopolitical risks, international order transfer, weak consumer demand and other factors, the development of the textile and clothing industry is facing great pressure. However, according to the statistics of the General Administration of customs, from January to July this year, China's textile and clothing exports reached US $189.35 billion, a year-on-year increase of 12.4%, an increase of 0.7 percentage points over the first half of the year. In July, China's textile and clothing exports reached 33.22 billion US dollars, up 17.6% year-on-year. Exports showed double-digit growth with better than expected data. In fact, there are differences between the statistical data and the actual feelings of most textile industry chain enterprises.

According to the industry analysis, the big reason for the difference between the data and the actual feeling is that there is "time difference" in the order. Usually, the buyer will place an order half a year or more in advance, so the goods exported in the first half of this year should be the order at the beginning of this year or at the end of last year. At this stage, the situation of enterprises receiving orders will appear in the future export data.

On July 26, the national cotton market monitoring system released survey data, compared with may, more than half of textile enterprises said orders did not improve. The survey involved 65 samples of enterprises. In addition to textile, nearly 80% of the enterprises said that the orders decreased, about 18% of the enterprises said that the external orders were basically stable, only about 3% of the enterprises increased their orders.

From the perspective of the market price of important raw material cotton in the textile industry, from January to July 2022, the average monthly price of 3128b cotton per ton of domestic standard cotton decreased from 22530 yuan to 17366 yuan, a decrease of 22.9%. At present, the spot price of 3128b cotton has dropped to 15000-16000 yuan per ton.

In the week of August 8-12, 30000 tons of reserved cotton were purchased through listing, and the actual transaction volume was 24000 tons, with a transaction rate of 8%. The average transaction price was 15694 yuan / ton, down 84 yuan / ton from the previous week. Since this round of cotton prices are not expected to enter the market.

Ye Jianchun, chief engineer of China Cotton Textile Industry Association, said that for cotton spinning enterprises, the decrease of raw material cost will also bring down the price of subsequent yarn. Cotton spinning enterprises have not benefited from it. They hope that the price of raw materials will be stable. He believes that the reason for the good export data does not rule out that some enterprises are still growing, but most small and medium-sized enterprises are worried about orders.

Good enterprises do exist. Under the downward pressure, Wuxi Hengtian has come out with a "smile curve" of growth against the trend, and has put forward bright export data: in 2020, it will increase by 88% compared with that in 2019 without epidemic situation, and maintain a stable growth of 20% every year under the situation of epidemic situation in the past three years. In the first half of this year, the export of the whole enterprise has exceeded 100 million US dollars. Hengtian is mainly engaged in the research and development of weft knitted fabrics, weaving, dyeing and finishing, garment design and production. Hengtian has gone beyond the traditional "internal supply and external supply" mode, anchored overseas labor resources and cost advantages, practiced the new mode of "external supply and external supply", effectively realized the "two ends in the outside", and provided a continuous driving force for enterprises to maintain development vitality.

　　 Wuxi Hengtian

It is also understood that many enterprises have experienced a decline in production and operation to varying degrees and are fighting for survival. The strategy adopted is to preserve strength in difficult days, increase adjustment and wait for the market to improve.

At a textile forum held a few days ago, textile entrepreneurs put forward their own views on the direction of product structure adjustment based on the current market demand changes.

Su Jianjun, general manager of Xinjiang dongchunxing group, believes that the problem of cotton textile enterprises is still structural. With the rise of various costs and difficulties in employment, some enterprises will face elimination in the future, and the export will slow down in the second half of the year. In the future, we still need to rely on the domestic market. Therefore, enterprises should make layout according to the domestic market.

Zhang Jianxiang, executive director and general manager of Hong Kong Mayer Pacific advanced materials, attaches great importance to the equipment level of the enterprise. He believes that enterprises must carry out technological transformation to improve quality and efficiency. At the same time, product development should be customer-oriented.

Wang Wei, general manager of qingfanglian Fiber Technology Co., Ltd., said frankly that the raw materials fluctuated greatly this year, the downstream transmission was not smooth, the profit was squeezed, and the market pressure was great. In the domestic market, we should do differentiated products, and at the same time, we should do differentiated technology and quality control.

In the face of cotton price fluctuations, many enterprises also put forward to use less cotton to deal with. Ye Jianchun reminded that the market of cotton textiles is very large, and blind adjustment of cotton consumption is not the best policy. The process, equipment and market need to be adjusted in the future, and the structure should be adjusted according to the product positioning of enterprises. At the same time, he hoped that cotton prices would remain stable and the price fluctuations would not be conducive to the stable production and operation of cotton spinning enterprises.