According to the price monitoring of the business club, under the influence of the sharp decline of the upstream polyester staple fiber futures and Zheng cotton futures in the first half of this month, pure polyester yarn and polyester cotton yarn followed the decline, and the raw materials gradually stopped falling and retreated after the middle of the month. As there was no expectation of a significant improvement in downstream demand, the yarn market was light, and inventories were high. Pure polyester yarn and polyester cotton yarn were mainly stable. As of July 29, the average market price of polyester yarn was 14300 yuan / ton, down 175 yuan / ton or 1.21% from 14475 yuan / ton at the beginning of the month, down 1.04% year on year. The average market price of polyester cotton yarn was 19160 yuan / ton, down 1440 yuan / ton or 6.99% from 20600 yuan / ton at the beginning of the month.
On July 16, a number of yarn representatives from Changle participated in the meeting to discuss the production reduction. Under the background of sharp decline in raw materials, high inventories and serious losses, they proposed that each self-discipline reduce production by 50%. Previously, more than 90% of the spinning mills in the main polyester yarn production areas in Fujian and Jiangxi have reduced production, and the operating rate has decreased from 68% in May to 51%, but it is still not enough for the current depressed market. Polyester yarn downstream in southern China is mostly used for knitting machines. Taking large circular knitting machines as an example, the starting rate of circular knitting machines in Fujian and Guangdong is only 2-3%, and Xiao Shao is around 40%, which is still in oversupply compared with the downstream. The equity inventory of finished products of the cotton mill was about 24 days, and the downstream purchase intention was not high, resulting in a cash flow loss of 300 yuan / ton.
The life of polyester cotton yarn is more difficult. Most cotton mills still have cotton inventory with a unit price of more than 20000 yuan / ton. Now cotton has fallen to around 15000. Although the immediate cash flow of yarn has become positive, the actual loss is serious. There are a large number of production reductions and closures in Shandong, Jiangsu, Hebei and Fujian. The inventory of cotton mills is generally more than one month, and there are not a few more than two months. The startup rate of polyester cotton yarn still has a downward trend. Domestic demand is sluggish, the “Xinjiang cotton” ban is outside, coupled with the sharp decline in raw materials, cotton containing enterprises are experiencing a “dark moment”.
The polyester staple fiber market fell sharply in the early stage, and crude oil and polyester raw materials rebounded after oversold. Affected by this, the polyester staple fiber market also stopped falling and stabilized. However, the commencement of cotton mills in Changle and other places began to decline, and the negative feedback of high inventory and low demand in the downstream was obvious. Although the futures stopped falling and stabilized slightly, the focus of shipment in the spot market gradually fell to follow up the early futures decline. The basis gradually weakened to around +350 to +450 of the 09 contract. As of the 29th, the mainstream of Jiangsu and Zhejiang 1.4d negotiation is about 7900-8100 yuan / ton, which is a single negotiation. During the month, Zheng Mian once hit the limit, and the main cf2209 contract fell to 13560 yuan / ton that day. Then Zheng Mian oversold and rebounded, and the main contract was sealed on the daily limit. Recently, Zheng cotton futures prices fluctuated too much, which had a significant impact on the upstream and downstream of the cotton textile industry, and the spot purchase and sales of cotton basically stagnated.
In terms of textiles, in July, domestic demand and exports were sluggish, superimposed on the traditional off-season, and downstream demand continued to be weak. Houdao weaving factory was cautious about going unipolar. The accumulation of finished products in the industrial chain continues to be serious, and the lack of liquidity makes it difficult to form positive feedback to the raw material end. According to the feedback of enterprises, the inventory of textile mills is low at present. If the order level recovers in the later stage, it is expected to trigger further replenishment. At present, some enterprises have enlarged the scale of replenishment at a low level. It is uncertain whether the peak season from September to October is still “not prosperous in the peak season”. It is expected that before October, it will be in the state of “buy as you go, buy as you go”.
Aftermarket forecast: Generally speaking, the recent yarn market sales continued to be poor, and the price continued to be weak, especially for cotton yarn, the manufacturer’s inventory was obvious, mainly at a loss, and generally struggled with helplessness and waiting. The current market is still low under the influence of domestic and foreign economic situation and high temperature. The cotton mills have basically taken measures to reduce production and protect prices. The market mentality is still insufficient in the near future, and it is difficult for the middle and lower reaches to purchase.