May 20, 2024

The textile market has misunderstandings and rational treatment of the real market

Seeing that in July, the market has said that "seven deaths and eight lives", that is, July is the off-season in the off-season of the market, and the textile industry is dying.

However, I recently learned about the three major markets of Lu, Yu and Henan, and found that there are many misunderstandings in various places, summing up three points.

Misunderstanding 1: Cotton yarns are reduced, prices are falling, and enterprises are between death and death.

It is undeniable that since June, domestic cotton yarn orders have remained dominated by small, scattered and small, and prices have also weakened. Corporate operations have indeed faced many challenges. But in fact, the situation is as follows: First, most companies maintain orders and are still running at full capacity. Investigations in Shandong Dezhou, Binzhou, Jining and other places, found that most textile enterprises are machine roaring, enterprises are working overtime to order orders, not a state of sluggish production; second, the price is weak, but the decline is not large. Since June, cotton yarns have been generally weak, but the cumulative decline in the past month has only been 200-300 yuan/ton, which is far from the decline of upstream raw materials, indicating the resilience of cotton yarn. Third, the profit margin is being thinned? It can be counted as a simple account: since the end of May, the reserve price of cotton reserves has been reduced by 748 yuan/ton, while the price of cotton yarn has been lowered by 300 yuan/ton, indicating that the profit margin of cotton yarn has not decreased but has increased.

Therefore, we can see that although there are not many orders for cotton yarn, but enough for enterprises to maintain production, the price of cotton yarns has fallen, but the raw materials have fallen more sharply, and the days of enterprises have been very moist, so what is the "between death and death".

However, there are indeed a few companies that have a hard time, and they have already closed their doors, but they are not mainstream.

Myth 2: The off-season is coming, and the company is rushing to take refuge.

Recently, many textile companies have said that they will temporarily close some production lines in the near future, or let workers leave in batches. On the 30th, a 100,000 spindle manufacturer in Henan issued a rotating holiday arrangement. However, the person in charge said: First, the summer is coming, and the holiday for the workers is for summer vacation. Due to summer production, various safety accidents occur frequently, and production efficiency is not high. Workers take turns to rest in order to improve production efficiency. Second, the winds of downstream stagnation are flourishing. Enterprises do not really want to sign too many orders, maintain the normal operation of the company, spend the summer and then start production in August and September.

It is understood that the Luan and Henan textile enterprises will shut down some of the production capacity every year during the summer, giving workers a holiday break. This year is no exception, and some regular manufacturers are scheduling vacation time. Cotton yarn production is expected to decline in July.

Misunderstanding 3: There may be structural and structural shortages of raw materials in the later part of the year.

In 2016/17, high-quality Xinjiang cotton has always been more popular. One of the big gimmicks of speculation is “Structural supply and demand tension”. Is this true? Or is it so serious that such structural supply and demand is tight?

To give an example: Xinjiang cotton that has recently been released from reserve cotton has dropped to around 10,000 tons per day. What is the transaction? Still 100% turnover. However, there is a phenomenon: that is, there is no rush to shoot, and the fare increase has not increased much, and it is still about 1,000 yuan/ton.

What is this indicating? In fact, the demand for textile cotton in Xinjiang is not as tense as the market speculation. Recently, many large-scale textile enterprises have indicated that enterprises use cotton basically enough. This year, "Luoyang paper expensive" may not appear.

Therefore, I would like to remind everyone that you should not be fooled again, rationally treating the real market, down-to-earth, and doing yourself well is the right way.

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