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As of March 3, 2021, the price of cotton futures is 16,385 yuan per ton. Since the low point in the first half of last year, it has risen by about 60% so far. Not only the price of cotton, but the news of the recent surge in cotton yarn prices has also blown up the circle of friends of textile people. So, what are the effects of the current rise and fall of cotton prices? How do spinning and fabric companies view the ups and downs of raw material prices and the trend of the market outlook? Does this mean that the textile market has ushered in a good start?

　　The rise in cotton prices stimulates the enthusiasm for cotton planting

　　 From April 1, 2020 until now, in less than a year, the US cotton’s main May contract price has risen from 48.35 cents/lb to 95.6 cents/lb. In the same period of time, the main domestic cotton futures contract price in May rose from RMB 10,090/ton to RMB 17,080/ton.

　　 Because cotton prices have risen and stayed at a high level for a long time, it has stimulated the enthusiasm of cotton farmers for a variety of cotton in the new year. It is understood that Xinjiang, Hebei, Hubei and other places are currently at the peak of spring preparation. Cotton farmers have increased their investment in agricultural resources. Cotton farmers in some production areas have also expanded their cotton planting area. Experts said that Xinjiang’s cotton planting area is expected to be stable in the new year. There are three reasons for the rise in China:

First, since the launch of new cotton in 2020, the purchase price of seed cotton in Xinjiang has been on the rise. High cotton prices have brought high profits, which has increased the enthusiasm of cotton farmers in planting, dispelling the idea of some cotton farmers switching to other crops, which is conducive to the total area of cotton planting. stable.

The second is that the Xinjiang Production and Construction Corps and some local organizations have issued a number of measures and policies to improve cotton planting quality, improve the level of improved varieties, and expand planting areas before cotton planting in the new year, effectively guiding cotton farmers’ efforts. Planting willingness is conducive to the increase of cotton planting area.

　　 Third, from the perspective of cotton farmers’ planting habits, cotton farmers in Xinjiang Corps and northern Xinjiang prefer to grow cotton. Although there are some uncertainties in the cotton planting area in Kashgar and other places in southern Xinjiang, the impact on the total area is limited.

　　 The continuous improvement in downstream demand has provided strong support for the continuous rise of cotton prices in the past year. At present, the domestic textile market has sufficient orders and smooth sales. Enterprises are actively purchasing raw materials and have a high enthusiasm for replenishment, which continues to boost cotton prices.

　　 It is understood that most textile companies are currently actively completing pre-holiday lint ordering contracts, and organizing lint storage to prevent upstream ginners and traders from breaking contracts due to the soaring cotton prices; at the same time, appropriate purchase of urgently needed lint cotton.

　　 Due to the ups and downs of cotton prices, many cotton spinning companies are holding a wait-and-see attitude towards purchasing new cotton. Local lint prices in Hubei have been raised by about 1,000 yuan/ton, but sales are slow. According to industry insiders, 80% of the local textile companies have not yet purchased new cotton, and 80%-85% of the companies still produce last year's orders. This year, there are fewer new orders and they are mainly concentrated in Jiangsu and Zhejiang. There are two main reasons why companies dare not accept a large number of orders. One is that the price of cotton and cotton yarn will go upside down, which will cause the company to be unprofitable; the other is that the cotton market will fluctuate and there will be sharp rises and drops. purchase.

　　 Cotton yarn is in short supply and prices are rising

　　 As of February 25, 2021, CY C32S pure cotton yarn closed at 25,450 yuan/ton, an increase of 1,455 yuan/ton in just one week, an increase of over 6%.

　　 From the perspective of cotton yarn quotations, the prices of cotton yarns of various varieties are now increased by 1,500 yuan/ton to 2,000 yuan/ton compared to before the Spring Festival. The cotton spinning mills are full of confidence in this year's production and operation, and the purchase and sales after the holiday are quickly on the right track. Yarn inventories were significantly lower than in previous years. As of February 25, the China Yarn Inventory Index closed at 9.2 days. If the peak season from March to April arrives as scheduled, the situation of textile enterprises in short supply will continue.

In terms of cotton yarn sales and shipments, some spinning companies adjusted the idea of rushing to make pre-holiday orders and completing the contract in time, and changed to completing pre-holiday orders in installments, giving priority to high-priced post-holiday cotton yarn orders and actively shipping them. . Many textile enterprise bosses believe that it is time to use full power, seize the opportunity to produce and sell, and strive to complete the annual profit target of 2021 in the first half of the year, and 70% or more of the production task.

　　 At present, most cotton mills in Anhui Province have resumed post-holiday production. Although the futures prices of cotton and cotton yarn have soared after the holiday, and the prices of cotton yarns of various varieties in cotton spinning mills have been increased by more than 1500 yuan/ton from before the holiday, downstream customers are still waiting and see, resulting in less actual cotton yarn transactions. The order is mainly before the Spring Festival.

　　 Downstream customers said "indigestion"

At present, downstream weaving factories have fully started, but compared with the price of upstream cotton yarn which rose by more than 10% in February, the current price increase of grey fabrics, fabrics, clothing, etc. is obviously lagging behind. Export-oriented companies and contract processing companies have become more cautious in receiving orders. Few fabric companies said they could not afford and digest the rising cost.

　　 The increase in the price of raw materials has also made many weaving companies regret it. Industry insiders said that due to the poor market situation of the global epidemic last year, the price of raw materials continued to fall, causing many companies that prepared raw materials before the Spring Festival in 2020 to suffer substantial losses. Therefore, many companies have been extremely cautious this year. Raw materials are bought and used at any time, and they have no intention of storing large amounts of raw materials.

　　 Experts believe that without the support of demand, even if the raw materials increase, it will not form a sustained market. However, as long as the upstream cotton yarn remains in short supply and the expectation of an improvement in the epidemic situation is added, it is unlikely that the grey cloth market will drop unilaterally in the first half of this year. The fluctuation of cotton prices is a normal market phenomenon. As long as the range is relatively controllable, there is no need to deliberately reduce output. Therefore, the capital chain situation of the factory may affect the start-up load of the factory in the first half of 2021: the inventory of the factories with sufficient funds may increase slightly, and the factories with tight funds will pay more attention to the production and sales rate.

Dongyang Laichi Environmental Technology Co., Ltd. has always been committed to the research, development and production of medical non-woven fabrics, spunbonded non-woven fabrics, elastic non-woven fabrics and non-woven fabrics. The elastic non-woven fabric products produced by it can be replaced, recycled, and reused, so you can no longer worry about health problems.

If you want to know more product information, please contact: Mr. Zhu 13706796423 Website: http://m.cnliequan.cn/