Cotton Yarn Weekly | Yarn price decline slows down, profits are gradually restored

In late April, the foreign epidemic was still in the developing stage, the yarn market remained weak as a whole, and the overall price of cotton yarn was still trending downward, but the decline was significantly slower than that in March. As of April 23, the average domestic C32S price closed at 19,130 u200bu200byuan/ton, a decrease of 88 yuan/ton from last week, and the decline has slowed down. Compared with the nearly 1,000 yuan drop in March, the average domestic C32S price has fallen by only 392 yuan/ton since April.　　 Part of the slowdown in cotton yarn prices is due to the rebound in cotton prices in April. However, in terms of start-up, some textile companies have already reduced production due to rising inventories and other reasons. However, the phenomenon of production cuts and suspensions is not common, and the overall inventory growth of textile companies has declined. As of April 23, China's yarn start-up load index was 50.4%, down 1.2 percentage points from last week. The cotton yarn inventory of spinning enterprises rose to about 29 days. Because foreign trade orders were basically cancelled, many foreign trade companies switched to domestic sales, and domestic orders appeared to be extremely sought-after. Some companies say that in order to grab orders, textile companies do not hesitate to cut prices sharply. Even so, most textile companies say that it is difficult to grab orders, and raw materials are purchased with orders, and they dare not stock up. Some companies with large stocks of raw materials have expressed serious losses. Spinners and downstream fabric shops mainly clean up inventory and sell goods. The shipping mentality is relatively strong. There are no new orders downstream, and the spinning mills dare not purchase raw materials, labor, plant, and raw materials. After waiting for various costs and expenditures, companies are eager to get the funds back from the circulation, so they repeatedly cut prices and sell. The price war in the market has intensified, causing a vicious circle in the market. Some textile mills simply restrict production, shift shifts or take holidays to ease the situation. From the point of view of spinning profit, although the theoretical profit and loss of pure cotton yarn is in a good position regardless of whether it is calculated from the spot or the 20th raw material, most spinning enterprises have high-priced cotton inventory in the early stage, and the actual profit is far from reaching. In terms of raw material prices before the crash, most textile companies were unprofitable and even suffered a lot of losses. After April, the price decline of pure cotton yarn slowed down, coupled with the gradual digestion of high-priced cotton in the early period, the actual profit level of textile enterprises will gradually be restored. In terms of imported yarn, currently foreign countries are affected by the epidemic, and production in India, Vietnam, Pakistan and other countries have been greatly affected. Southeast Asian textile companies that were previously suspended by measures such as 'closing the country' are also gradually recovering recently, although they are still far from normal. far. As of April 23, the spot price of FCY Index C32S discounted to RMB closed at 19,884 yuan/ton, a decrease of 54 yuan/ton compared to the same period last week. This week, Pakistan’s cotton yarn prices fell sharply and commercial activities began to slowly recover. However, yarn demand has not recovered after the nationwide lifting of the ban, and domestic sales and export prices continue to be under pressure. In India, as the cotton planting period is mostly from May to July, as far as the current situation is concerned, the hope that India’s new crown epidemic will be completely controlled and gradually disappear in mid-May or even mid-June is almost zero. Sowing cotton is inevitable. Make an impact. In addition to Thailand, Vietnam and other places due to droughts and locusts and other events, the output has fallen sharply, while the domestic epidemic in India has caused the unemployment rate to continue to rise, and the domestic demand for food has also risen. 'Cotton increases grain　　 To sum up, although the market is not as expected, as the epidemic improves and the domestic economy is slowly recovering, most companies still choose to work hard and refuse to give up easily. While Southeast Asian countries continue to maintain low operating rates, while the European and American countries will gradually lift the ban in May, China's orders may be improving. Of course, the specifics still depend on the control of the epidemic abroad. As a textile worker, we must always prepare for the worst and hope for the best. Article Keywords: 　Cotton Yarn