Trading continues to be light, the RMB exchange rate appreciates to repair the cost of imported yarn

Since July, the overall transactions in the yarn markets in various regions have been lighter than before. Traders and textile companies have continued to lose their minds, and most of their confidence in the market outlook has declined. As of July 9, the average domestic C32S price closed at RMB 18,602/ton, which continued to fall by RMB 22/ton compared to last week.　　 After a round of decline, cotton raw material prices have gradually rebounded since April. At the end of June, when the news of “boots landing” was thrown out, many textile companies and traders believed that the future cotton should gradually decline as the market supply increased. Unexpectedly, in July, the dumping of reserves officially began. Not to mention 100% daily transactions, the bidding price has risen, and both the spot and the Zheng cotton started the mode of rising, which caught the textile enterprises by surprise. Zheng Cotton’s main contract price for the first three trading days in July rose from the lowest price of 11,650 yuan/ton to the highest price of 1,2015 yuan/ton, an increase of 360 yuan/ton; at the same time, the transaction price of the three trading days before the State Reserve Cotton’s auction was discounted to the standard level. The average price of 3128B reached 12,704 yuan/ton, which was more than 867 yuan/ton higher than the reserve price of cotton wheels, and 769 yuan/ton higher than the Zheng Cotton’s main contract settlement price of 11,935 yuan/ton. Many textile companies that kept stocks of raw materials in the early stage had to join the 'sales and reserve army' for fear that the prices of raw materials would rise later.　　 It stands to reason that a surge in upstream costs will drive cotton yarn to improve. This is the market change that textile companies are most willing to see. However, through their understanding of many textile companies, they generally report that it has entered the textile off-season. Due to the risk of a second outbreak of the global new crown pneumonia epidemic, downstream sales are still difficult. There is no sign of rising cotton yarn prices. On the contrary, there are still easy to fall but difficult to rise. risk. At present, the downstream foreign trade has fallen to a freezing point, and the only ones that still have a little market are domestic sales, and domestic sales do not have high requirements for cotton yarn. It is understood that the current price of 40 yarns and above cannot go up, and the goods cannot be sold. On the contrary, the higher price-performance ratio of National Cotton Reserve meets the requirements of textile enterprises, which is the fundamental reason why the auction and storage are so popular in recent days. But on the other hand, the sale of large bundles of cotton from the State Reserve and the substantial increase in transaction prices and outbound fees make it unfriendly to small textile companies. Many small textile companies had to lower their start-ups when they had no choice, and even some textile companies that never missed the national holiday. This time, Qingming Festival, May 1st, and Dragon Boat Festival have consecutive holidays.　　 The grey fabric market in July continued to deepen following the off-season in May. New orders were scarce. Although the sales of thicker fabrics were gradually moving due to seasonal changes, the weak terminal demand made it difficult to support the entire off-season market with sporadic orders. Under the shortage of orders, some weaving factories had to cut prices or increase preferential efforts to ship at the same price. The price of grey fabrics remained stable and weak. As of July 9, the cotton grey fabric CG C32 was reported to close at 4.5 yuan per meter. Beginning in April, weaving factories’ inventory has accelerated and has reached a high level of about 33 days. Especially after the end of the mask cloth order in June, the production and sales of other types of grey cloths have been low, and some have already reached the level of January. Under this circumstance, weaving mills also had to adopt a series of measures such as lowering the start-up, holiday, and changing production.　　 In terms of imported yarn, as of July 9, the spot price of FCY Index C32S in RMB closed at RMB 18,476/ton, a slight rebound from the same period last year, rising by RMB 15/ton. Domestic and foreign prices were upside down and maintained at around RMB 120/ton. The RMB exchange rate against the US dollar appreciated sharply this week. As of today, it has broken through 7, and closed at 6.9943. The appreciation of the renminbi has reduced the purchase cost of imported yarn, and the profits of traders have been restored to a certain extent. However, the current cargo price converted into RMB has little advantage compared with the spot price. Considering that the downstream demand has not improved, traders and weaving mills are still cautious in placing orders for imported yarn. Therefore, the RMB exchange rate has risen by several hundred this time. It is temporarily difficult to promote the purchase of a large number of cargoes, but it is a better time point for the settlement of foreign exchange for early orders. Article Keywords: 　Imported Yarn