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The Price Of Yarn Is At A Low Level For Ten Years.

2020/6/6 9:25:00 0

Yarn Price

In the twinkling of an eye, time entered the middle of 2020, and in May, the cotton yarn market was a bit of a turning point. After the May 1st Festival, a wave of replenishment of the big weaving factories formed a short boom. But by the end of the month, with the fading of the clothing terminal, the yarn market was once again fading, followed by the traditional off-season. As of June 4th, the domestic C32S average price was 18715 yuan / ton, unchanged from last week.


Cotton futures did not fluctuate significantly this week. The spot CC3128B index closed at 11919 yuan / ton, up 71 yuan / ton compared with last week, or 0.6%. Although the yarn has narrowed down, the price of cotton yarn is much more stable because it has dropped nearly ten years ago. The cost is rising, but the finished product is not up to price, which makes the already very small profit more "not to be looked straight ahead".


Textile enterprises, as the beginning of this article, experienced a "glimmer of dawn" in early May, and this week cotton yarn trading weakened again. As of June 4th, China's yarn inventory index returned to 30 days, unchanged. Looking back at the consumption situation in the first half of the year, we are wandering in "bad" and "worse". In February, there were orders in the hands of spinning enterprises, but unfortunately they could not start. In March, it was easy to start the order, but faced with a large number of export rebates, but at that time, when the office began to increase, some enterprises still received some orders for domestic and foreign trade home clothes. In April, the outbreak of the epidemic in foreign countries, domestic consumption has not yet recovered, textile enterprises are facing the most "no single connection" situation. But hope is often born in the most desperate. When a large number of textile enterprises plan to make a long holiday on May 1, they begin to receive some orders unexpectedly. As a result, some holidays were cancelled or greatly shortened, and workers were recruited back in advance. It is understood that the increase in orders in May was partly due to an improvement in domestic sales, partly due to orders from Europe and the United States to Southeast Asia, which were transferred to domestic enterprises by Southeast Asian enterprises. However, the market was not busy for a few days, and orders began to decrease at the end of May. Due to the gradual start of Bangladesh and other countries, some of the orders transferred back to Southeast Asia. At present, the general situation is that there are fewer enquiries, but orders are generally smaller. Orders for some cotton mills have remained at around 7-10 days, so the uncertainty in the future is still very strong, and the sharp improvement in consumption has not yet appeared.


Weaving factory experienced a centralized replenishment at the beginning of last month, due to the lack of subsequent orders, the intention to continue to purchase is not strong. As of 4, the load index of China's grey fabric was 49.4%, and the stock was closed for 31.3 days. Due to the lack of orders in the textile mill, the regular production of machinery increased and the stock gradually increased. Compared with last year, the inventory level of the textile mill is higher than that of the same period last year. The following 6, 7, and August are the traditional off-season, and the probability of domestic orders being improved is very small. At the same time, the overseas epidemic situation is stacked up again, the Sino US relations are again strained, and the export orders recovery is still in the air, so the June mill inventory The pressure is increasing. The recent spread of the "stall economy" can alleviate some of the pressure on the weaving mill remains to be seen, but even if there is, it is estimated that the clothing made of low-end fabric will be slightly improved.


The price of imported yarn stabilized this week. As of June 4th, the spot price of FCY Index C32S was 18519 yuan / ton, down 3 yuan / ton. It is understood that the supply of imported yarn is relatively large recently, and domestic yarn has caused a great impact. At present, the market still imports 32S high matching, and 40 combed goods are relatively better. Most enterprises reflect that there is basically no profit margin at present, and most of the orders are small and small. Most enterprises still focus on stock and shipping. Some downstream garment factories have indicated that export orders have slightly recovered, with some Bangladesh orders. The purpose of the participants of the imported yarn market is not only financing but also after gambling. When the market is rising and the price of cotton inside and outside is big, it can be full of money. However, when faced with this black swan this year, it has to face the fall of price cliff. In the past few months, the import yarn traders have had a hard time, with an average loss of about 2500-3000 yuan per ton. In May, due to the improvement of market consumption and the drop in import yarn, the profit of the order was several hundred yuan, so the order quantity of traders increased again. Some traders hoped to make up more of the previous losses, so it is estimated that the volume of port arrivals in June will be more than 150 thousand tons. However, due to the risk of delivery, exchange rate and price movements, it is not yet clear whether we can really achieve profitability. In May, yarn shipments were relatively better. Some traders increased the intensity of clearing. At present, the total inventory of the port is about 180 thousand tons, down by about 20 thousand tons, but still higher than the same period last year.


Apart from the other countries, Pakistan's economic growth has been significantly improved due to the re opening of the economy. Vietnam is still running less than 40%. Unlike India and Pakistan, the Vietnamese government has not implemented very strict policy management for the epidemic. The government has not explicitly asked the enterprises to stop production, and Vietnam's textile enterprises have started to cut down more often because of the lack of demand and sustained losses. Affected by supply and demand and macroeconomic factors, global cotton prices have continued to decline overall since the middle of 2018. Because Vietnam does not produce cotton, spinning enterprises have maintained high inventory for 60-90 days for a long time, and cotton inventories continue to suffer losses during the continuous decline of raw material prices. As the price of cotton yarn is transparent and competitive, Vietnamese textile enterprises continue to face "plateau material cost and low finished product price" situation. In addition, the current demand in China, which accounts for more than 50% of its export volume, has made the cotton yarn trade in Vietnam completely transformed from the seller's market to the buyer's market. At present, Vietnam's textile enterprises are in deep trouble. The downward trend of the global economy, competition from other countries and the fragility of the Vietnamese spinning industry make Vietnam's textile enterprises pressure continue.


Looking ahead, on the one hand, the price of cotton yarn has been at a low level in history, and the spinning enterprises are generally losing money. Most textile companies are reluctant to sell prices. On the other hand, the demand for clothing in Europe and the United States is difficult to improve in the short term, and the sustainability of domestic orders needs to be verified. The overall demand for pure cotton yarn is still poor, and the traditional off-season is coming soon. With the obstruction of imported yarn, the fundamentals of pure cotton yarn are not allowed to enjoy. It is estimated that the price of cotton yarn will not change.


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