Jiangsu: Textile Enterprises To Reduce Raw Material Inventory Yarn Prices Continue To Decline

Affected by Sino US trade friction, the downstream consumer market has shrunk, leading to a continuous fall in cotton prices. The price of Zheng cotton CF1909 has fallen to around 12300 yuan / ton. China cotton net reporter went to the front-line research and understand that, in addition to export orders in the US market, export orders in Japan and abroad are less affected by export orders.

A textile manufacturer in Xuzhou, Jiangsu, said that 100% of the current enterprises started, and 1000 tons of raw materials were stored in cotton, including 400 tons of cotton reserves, 600 tons of commercial cotton, 2 months of inventory turnover, 100 tons of cotton yarn and 7 days of turnover. The average price of cotton reserves is 14100 yuan / ton. As the price goes down, enterprises will continue to participate in auction to reduce the cost of raw materials. At present, the price of hand picking cotton in Xinjiang is 14300 yuan / ton (fixed). The products are mainly combed 32-50s, of which combed 32S price is 24000 yuan / ton, the actual transaction price is 23500 yuan / ton, and the product profit is limited. The same specifications of cotton yarn products, before the price of yarn fell 26000 yuan / ton, a decline of 2000 yuan / ton, and cotton prices fell similar. Due to export to Japan and South Korea, enterprises are less affected by Sino US trade.

It is understood that according to the current cotton price calculation, the enterprise spinning still has a certain profit, but with the price of raw materials in advance, the enterprises are basically losing money. The company said that the current price of cotton is 13000 yuan / ton, which is a reasonable price, which is basically the same as the domestic and foreign cotton prices. The cotton price in the new year is expected to be 14000 yuan / ton. In order to cope with the late cotton price decline performance, we are prepared to reduce the scale of raw materials inventory and ease the funding shortage.

The company believes that cotton prices have dropped to low levels in recent years, mainly due to internal and external factors. From 2016 to 2018, due to the stable price of cotton market and the large number of rounds of cotton reserves, the profits of enterprises were more objective, resulting in the continuous expansion of production capacity, the accumulation of inventory in the cotton textile industry chain, coupled with the impact of external Sino US trade friction, and the decline of the downstream consumer market, which eventually led to a continuous decline in cotton prices, and the industry shuffle is inevitable.