News Center
News Center

Focus on making fine cloth

Textile market undercurrent surge to inventory pressure surge

2021-04-19 管理员 Read 1051

In recent years, the textile market is surging undercurrents, increasing business risks, the main business status and market mentality have changed, with the purchase of raw materials, products actively go into stock. Although each enterprise supports the price, but under the pressure of mountain, the enterprise gradually loses its pricing power.


     Market downturn makes it difficult for enterprises to get orders. Due to the escalation of the Sino-US trade war, the two countries impose tariffs on each other, the domestic textile export orders are blocked, the demand weakens, and the overall production and marketing of the supply chain is discussed. According to Shandong, Jiangsu and other enterprises, yarn orders have declined significantly since May. Although enterprises continue to reduce their quotations slightly, the market mentality is still pessimistic and goods are moving slowly. At present, enterprises are facing a dilemma: continue production, increase inventory pressure; stop and wait and see, greater losses. Enterprise management is like treading on thin ice, dilemma.


     Raw materials fluctuate greatly, with the use of buy-as-you-go. Recently, Zheng cotton has dropped to 13370 yuan per ton, and this week's reserve cotton sales floor price is 13893 yuan per ton (standard price), which is 579 yuan per ton lower than the previous week. Xinjiang cotton spot decreased by nearly 1000 yuan/ton. Raw materials fluctuate greatly, most textile enterprises dare not hoard cotton. According to reports, after the Spring Festival, the stock of raw materials in most textile enterprises has been kept at a low level. The stock of raw materials in large factories is maintained for 20-30 days, while that in small factories is maintained for only 10-12 days. Although enterprises are thirsty for cotton, they are also shunning cotton. Entering this week, textile enterprises are mainly bidding for reserve cotton, other cotton resources have been reduced procurement.


     The yarn market is rocking. Recently, domestic yarns have been falling steadily. As of May 23, the quoted price of 40 general carding yarns in Binzhou area of Shandong Province was 25,000 yuan/ton, 300 yuan/ton lower than that of the 20th. The quoted price of 32 ring spinning yarns in Weifang, Shandong Province was 21,200 yuan/ton, 400 yuan/ton lower than that of the 20th. Yarns in other areas also fell slightly in varying degrees. At the same time, polyester yarn and cotton yarn prices also fell slightly. Up to May 23, a 32S polyester yarn factory in Shijiazhuang, Hebei, quoted 14300 yuan/ton (including tax), which was 200 yuan/ton lower than May 20. Sales volume was still acceptable and large documents could be negotiated. The price of 32S cotton yarn from a factory in Weifang, Shandong Province, is 15,200 yuan per ton (including tax). Compared with May 20, the price is 200 yuan per ton, and the volume of cotton yarn is slightly more favorable.


     Due to the stagnation of yarn sales and the sharp decline in raw material costs, textile mills have plans to reduce prices to attract orders. The head of an enterprise in Foshan, Guangdong, said that the impact of Sino-US trade frictions on the cotton textile industry chain is far greater than the industry's expectations. At present, the Foshan market is all cotton yarn sellers. The textile enterprises basically send all sales staff to the first-line market, which shows the difficulty of sales. At present, the yarn market is faltering. The reason why the price reduction tide has not yet arrived is that the raw materials purchased in the early stage are expensive and the high-cost yarns are still struggling to support.


The difficulty of domestic yarn de-stocking increases due to the lack of downstream force and external yarn impact. According to industry analysis, even if the recent yarn price reduction tide, the pressure of inventory is still great. On the one hand, the weak consumption of grey fabrics and insufficient orders lead to the low start-up rate of enterprises; on the other hand, in May, the stock of foreign yarns in China's main port reached a historic high, the bonded area and logistics area were "full of yarns", and traders were eager to cash in their shipments.


     Therefore, during May-June, domestic textile enterprises are still facing many difficulties in their operation. Despite the scarcity of raw materials, they dare not stock up. Although the yarn price has been lowered, it is still difficult to get orders. Although the cost has been upside down, the yarn is still severely impacted by the external yarn. Businesses generally look forward to a better trade situation and hope that the meeting between the heads of state of China and the United States in the G20 will bring good news.