Cotton Yarn Weekly | The market is slowly picking up

This week, the price of cotton yarn had a limited downward trend. Although it continued to set a new low for the year, it only fell by 8 yuan/ton compared with last week. As of May 21, the average domestic C32S price closed at 18,732 yuan/ton, a narrowing month-on-month decline.　　 Cotton spot transactions were relatively active this week, and prices fluctuated upward. As of today, CC3128B reported closing of 11,900 yuan/ton, an increase of 385 yuan/ton or 3.34% from the same period last week. Thanks to the support of raw materials, yarn prices stopped falling and stabilized, and market transactions picked up slightly. From the perspective of profit, if the current cotton is used as the theoretical cost, the profit has turned into a loss. Some market participants responded: 'We still don't have much confidence in the current market, and it is still difficult to significantly increase shipments.'　　 From the perspective of the inventory of the entire industrial chain, the current upstream and downstream goods are relatively picking up, and the inventory is mainly backlogged at the raw material end. As of the 21st, the China Yarn Inventory Index closed at 28.8 days, and the grey fabric inventory closed at 30.9 days. At present, most textile enterprises receive small orders, and they still focus on destocking. The export of cotton yarn has improved. Although the quantity is not large, the overall situation is better than the previous period when there was no order to do.　　 In terms of start-up, this week maintained a slight upward trend. As of the 21st, China's yarn start-up load index closed at 50.7%, and grey fabrics closed at 49.8%. Affected by the epidemic, many orders have been cancelled or delayed this year. However, there are currently 34 countries in the world that have unblocked them. As more and more countries unblock and open ports, many of the goods that were originally floating at sea have been able to go smoothly. Arrived at the port of destination, and some foreign trade companies received orders for autumn and winter clothing. At the same time, some companies began to 'share' orders, apply for group heating, and jointly complete large export orders. The foreign trade market seems to have improved. Entering May, the imported yarn almost started the 'sweeping down' mode. As of May 21, the spot price of FCY Index C32S discounted to RMB closed at 18,595 yuan/ton, a direct decrease of 5.9% compared with the beginning of the month, which also directly led to internal and external factors. The yarn price difference changed from negative to positive. According to feedback from traders, since mid-May, domestic and foreign trade inquiries, inspections, and transactions of imported cotton yarns have bottomed out.　　 Looking at different countries, due to the impact of the new crown epidemic, Pakistan's domestic cotton yarn production, transportation and port operations were basically in a state of suspension in March and April. Therefore, it is not uncommon for buyers and sellers to negotiate to terminate contracts or even unilaterally break contracts. However, as Pakistan’s cotton, spinning mills, and weaving companies pressed the “restart button” in early May, and the export quotations of Pakistan’s cotton yarn have fallen sharply in the past two months, Chinese buyers’ operations of “breaking contracts and then signing contracts” have become more severe. many. A Pakistani spinning mill with 20,000 to 30,000 spindles reported that due to the slow resumption of production and sluggish demand in domestic weaving and apparel companies, spinning mills have taken exports to China, Bangladesh and other Southeast Asian countries as a breakthrough point, and the price and quality competition is very fierce. India is not so 'lucky' anymore. The endless increase in the period of 'closing the country' has almost crushed India's society and economy. Although India is advocating the resumption of work and production in a small area, the closed roads and ports hinder the liquidity of the entire cotton spinning industry. This also explains why the price of cotton yarn in India has fallen the most compared to Pakistan and Vietnam in recent days. However, in China, as Japan, South Korea, and Europe have successively started the economy, trade, retail, and transportation, some export orders for textiles and clothing have slowly arrived. Coupled with the re-execution of the contract that was suspended in the previous period, cotton yarn consumption has shown a rebound. India, which could not wait to unblock it, eventually wiped out the patience of many Chinese buyers and turned its purchasing focus to countries such as Vietnam and Pakistan. On the whole, traders suffered a large loss some time ago. Although they still dare not be too optimistic about the market outlook, their mentality has basically been adjusted. Most importers are thinking about where they fall and where to get up, so they continue to order when the time is right. When we get up, they feel that although the market will fluctuate, in the long run, if we continue to do it, we can always get an average industry profit. Article Keywords: 　Cotton Yarn