After The Spring Festival, Textile Enterprises Will Return To Work And Production Smoothly, And The Market Is Expected To Have A Better Prospect

On the eighth day of the lunar new year, they began to return to work in succession. A few enterprises did not have holidays during the Spring Festival to maintain normal production. Most enterprises in Xinjiang maintained full production during the holidays. Most textile enterprises returned to work smoothly after the festival, and some textile enterprises returned to work ahead of schedule. However, at present, most of them have completed orders before the festival. Due to the abundant supply of cotton in the market, Zheng Mian Futures has not yet opened. The downstream textile enterprises are full of wait-and-see mood, and have not yet started the purchase plan.

However, from the perspective of the raw material stock of textile enterprises before the festival, the inventory is mostly 15-30 days, lower than the perennial level. And from the perspective of the yarn inventory level of textile enterprises, as of January 20, the yarn inventory of textile enterprises in major regions of the country was 21.6 days, with a year-on-year decrease of 3.5%. It is expected that textile enterprises will still have raw material stock replenishment.

From the market situation before the festival, cotton is still in a state of strong expectations and weak reality. Strong expectations support the sharp rise of Zheng cotton futures prices, while weak reality limits the rise of cotton spot prices. Therefore, the rise of futures prices is greater than that of cotton spot prices, and the cotton futures spot price gap has also narrowed.

As of January 20, the current basis difference of domestic cotton futures (spot price - closing price of Zhengmian main chain) was 646 yuan/ton. From the perspective of cotton spot price, it basically recovered to the normal level. The rise of Zhengmian futures price gradually peaked. Whether orders were settled on schedule played a key role in the rebound of cotton prices.

To sum up, textile enterprises resumed production smoothly after the festival, and the market's expectation of downstream demand continued to improve, but cotton prices still need to be supported by substantial orders, focusing on downstream consumption.