According to feedback from textile enterprises in Henan, Jiangsu, Shandong and other places, the market situation has changed a lot since mid-to-late September, catching enterprises off guard. In addition to the obvious lack of quality in the “Golden Nine and Silver Ten” due to export orders such as Christmas and Easter in 2021 being 2-3 months in advance, difficulties such as epidemic prevention and control, rising sea freight, and container shortages have gradually been resolved one by one, but there are still Without “breathing a breath”, two bad news fell on the head again, which made the textile enterprises a little confused.
First, power cuts and dual energy consumption controls started in Zhejiang, Jiangsu, Guangdong and other coastal areas and quickly spread to most provinces across the country. Printing and dyeing factories, weaving factories, Cotton spinning mills have been affected to the same extent, which has a very prominent impact on the company’s order taking, order arrangement, production, delivery, etc.; secondly, Zheng cotton has skyrocketed since last Friday, triggering a substantial follow-up of cotton spot prices and reserve cotton rotation transaction prices , the pressure on raw material cost of cotton spinning mills increased suddenly.
A medium-sized cotton spinning mill in Dezhou, Shandong Province said that being “enemies from both sides” has put a large number of domestic enterprises in a very difficult and embarrassing situation. Affected by factors such as “control” and the “sick” restart of the textile and clothing industry in Southeast Asian countries, the growth of terminal orders slowed down significantly in August/September and even many manufacturers were unable to make ends meet with orders. The phenomenon of overstocking of cotton yarn became more and more obvious, and the pressure on funds continued to rise. ; On the other hand, since September, the ex-factory price of cotton yarn has been falling, and profits have been greatly reduced or even cut in half; cotton futures have soared, putting textile companies in a dilemma. If cotton yarn quotations are significantly raised, it will inevitably trigger downstream fabric factories, clothing and Resistance from terminals such as foreign trade companies will inevitably lead to loss of households; if yarn prices are not raised or slightly adjusted (to protect customers), and the rapidly rising raw material costs cannot be shared and digested, textile companies will lose money and even face the risk of suspending production and going bankrupt.
Judging from the survey, affected by the soaring price of Zheng cotton in the past two trading days, a large number of cotton spinning mills have reduced or not quoted external prices. This is in contrast to those who placed orders in mid-to-late September. Customers or new orders negotiate to increase the yarn price, hoping to reduce the losses caused by “squeezing up and pushing down”. According to industry analysis, the price of Zheng cotton plummeted and surged in September, which had a relatively large impact and damage to the link order/production of the entire cotton textile industry, which made it worse. </p
