The overall market situation of pure cotton yarn in July can be said to be very weak. The inventory level of textile enterprises continues to rise, and there are more production reductions and suspensions than in previous years. However, under such market conditions, there are also varieties that perform better, such as open-end cotton yarn. And 60 count cotton yarn. So next, the editor will talk about the open-end cotton yarn that has been performing more eye-catchingly recently.
As can be seen from the above figure, the price trend of open-end spinning cotton yarn and ring spinning cotton yarn were basically the same from January to May. Starting from June, the price trend of OEC32S and ring spinning cotton yarn remained synchronized, but the price trend of OEC21S deviated. , relatively strong.
Recently, due to rumors of postponement of cotton stockpiling and weak downstream demand, the prices of various varieties have declined to varying degrees, including 60-count cotton yarn, which has relatively good shipments. However, the price of open-end cotton yarn has increased. In the near future, the price of open-end cotton yarn has increased. In the falling price market, it rose against the trend and stood out. So what is the reason for the price differentiation between open-end spinning and ring-spinning cotton yarn?
1. Raw material price trends diverge
An important reason for the price differentiation of open-end cotton yarn and ring-spun cotton yarn is the differentiation of raw material prices. It can also be seen from the above figure that unless the cotton market changes significantly, the price of combed noil is actually higher than that of raw cotton. Be more stable. However, this pattern has obviously been broken in 2017. Since May, the price of cotton has actually not changed much, but the price of combed noil has continued to rise. It is now more than 1,000 yuan/ton higher than the low in April, which is consistent with Raw cotton price differences narrowed.
The reasons for the sharp increase in the price of scraps such as combed waste cotton and car belly are: first, domestic environmental protection issues, some small processing plants without environmental protection qualifications were forced to suspend production; second, imported waste cotton was also blocked from the country, and the supply further increased. Reduction; third, the overall air spinning equipment in the market has increased this year, and the demand for raw materials has also increased.
The cotton used in OEC32S is still mainly raw cotton, and can only be used with 30% fines at most. Moreover, the fabrics woven by weaving factories currently using OEC32S and low-count open-end spinning are also used for different purposes. The market for OEC32S is mostly biased towards C32S.
2. Differentiation of downstream orders
In addition to the impact of raw materials, downstream demand also has certain support for the market of open-end cotton yarn. Although in the traditional textile off-season, the recent trading atmosphere of open-end cotton yarn has gradually weakened, but it is not obvious. Currently, shipments are still relatively smooth, and the inventory levels of textile companies mostly remain low, and the supply of some varieties is tight. As for ring-spun pure cotton yarn, the off-season atmosphere this year is very obvious. The inventory levels of textile enterprises have increased rapidly. Under the pressure of inventory, prices have fallen.
So what is the profit level of open-end cotton yarn that has always been outstanding?
From the profit point of view, starting from April, the profit level of all varieties of cotton yarn has shrunk, but the profit of open-end cotton yarn has declined significantly faster than that of other varieties. Fortunately, it can still maintain a small profit, and with the increase in cotton yarn prices The profit level has improved slightly recently, while other varieties, C32S, C40S and JC40S have begun to lose money.
So what will be the market situation later?
From the perspective of raw materials, in the short term, the fundamentals of tight supply and demand for open-end spinning raw materials such as fine fell and lathe are difficult to reverse. In the later period, as the market situation improves and the operating rate of textile enterprises increases, the supply of scraps will increase. , but the increase will not be too large. The price of raw materials is more likely to continue to rise, but considering the price difference with cotton, the increase has been relatively limited. Looking downstream, the demand for open-end cotton yarn will continue for some time in the short term, and the phenomenon of weaving mills replacing imported siro-spun low-count cotton yarn with domestic high-quality open-end cotton yarn is still increasing. Therefore, it is expected that open-end cotton yarn will continue to maintain its current market price in the short term, and prices are likely to remain firm.
The overall market situation of pure cotton yarn has been weak recently, but open-end cotton yarn has “always been the standout” and has risen against the trend in the falling prices. The main reason is that the prices of raw materials such as raw materials and car belly are constantly rising. In addition, downstream demand is also acceptable. However, because the yarn price cannot keep up with the increase in raw material prices, the profit level has narrowed. It can still maintain a low profit level at present, and it is better than some other ring spinning varieties. In the later period, it is expected that the current market situation will continue to be maintained, and the price is more likely to remain strong.
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