Pure Cotton Yarn: Low To The Dust, But Still To Ride The Wind And Waves

In the face of the current downturn in the domestic pure cotton yarn market, I especially want to use this sentence to comfort and encourage our "cotton yarn people" to shoulder the hard times of this industry.

Since 2011, the domestic cotton price fell to a high level and entered the downward channel, the whole domestic textile industry began to have a hard time, among which pure cotton yarn enterprises were the first to bear the brunt. By the natural relationship between cotton and pure cotton yarn, whether the operation of yarn enterprises is good or not depends on 70% factors of cotton. For the spinning enterprises with standing stock of cotton raw materials, the continuous decline of cotton price represents the continuous devaluation of assets. At the same time, the falling cost frustrates the price of pure cotton yarn. The yarn enterprises suffer from both sides, which forces a large number of yarn enterprises to withdraw from the pure cotton yarn industry.

However, after the survival of the fittest in the textile industry, the word "supply exceeds demand" can still be seen everywhere in every corner or several periods of the textile industry, and the market attraction has not improved significantly. Since 2014, the fixed asset investment in the national textile industry and the added value of industries above designated size are in a declining state. The specific data shows that from January to June 2020, the fixed asset investment of the national textile industry decreased by 22.4% year on year; from January to June 2020, the added value of the national textile industry above designated size decreased by 4.5% (see Figure 1).

Figure 1

In 2020, the epidemic situation will be even worse. At the beginning of the outbreak, the situation was not so serious, but in a short period of time, the development of the event exceeded people's expectations, and everyone began to worry about the impact of the epidemic on the economy. According to the data, from January to February 2020, China's textile and clothing export volume was 29.835 billion US dollars, a year-on-year decrease of 20.0%. Among them, the export volume of textiles (including textile yarn, fabrics and products) was 13.773 billion US dollars, down 19.9% year-on-year; the export volume of clothing (including clothing and clothing accessories) was 16.062 billion US dollars, a year-on-year decrease of 20.0%. After that, with the help of the control of the domestic epidemic situation and the efforts of various parties to restore the economy, textile and clothing exports improved in May, of course, the export of masks made a greater contribution. From January to June 2020, China's textile and clothing exports amounted to US $125.188 billion, a year-on-year increase of 3.16%; in June 2020, China's textile and clothing export volume was 29.032 billion US dollars, a month on month decrease of 1.77% (see Figure 2).

Figure 2

This year, the textile industry is depressed, the price of pure cotton yarn is falling step by step, low to the dust. According to Longzhong monitoring data, as of July 16, the benchmark price of domestic pure cotton yarn was 18500 yuan / ton, down 1800 yuan / ton or 8.87% compared with the end of last year (see Figure 3). From the regional perspective, Shandong Dezhou area general comb ring ingot 32S tax inclusive negotiation 18600-18800, combed ring ingot 32S tax inclusive negotiation 22000-22500 (delivered within the province), combed tight race 32S cash negotiation 23500-24000; Shandong Liaocheng area general comb ring ingot 21s tax inclusive negotiation 18200, general combing ring ingot 32S tax inclusive negotiation 18600-19500 (high-quality cotton), oe21s tax inclusive negotiation 13000-15000; Shandong Weifang general carding ring ingot 32S tax inclusive negotiation negotiation is 13000-15000 About 18000-18600 for 32S ingot, 19500 for high configuration raw cotton for 32S ring ingot, and about 20000 for 40s ring ingot. Under the impact of low price of traditional off-season and imported yarn, domestic pure cotton yarn is in general. Due to the lack of orders, some downstream weaving and printing enterprises choose to reduce the load or stop the machine, which is absolutely negative for the upstream yarn enterprises. However, yarn enterprises can only choose to sell at a low price or stop production.

Figure 3

It is obvious that low price competition will not be an effective way for enterprises to compete with each other in order to ensure the normal development of the market. Generally speaking, with the change of seasons after August, and taking into account factors such as the promotion of the "double 11" in the later period, foreign Christmas and winter clothing demand, the traditional off-season of the textile industry will turn to the peak demand season, and the recovery of downstream weaving will lead to an increase in yarn demand, and pure cotton yarn consumption will also benefit. However, from this year's point of view, no one can say clearly about the future recovery schedule of terminal demand.

Can only hold a good wish, hope that you are brave, ride the wind and waves, forge ahead!