Gradually Deepening The Market In July

In the past month, the domestic cotton futures and spot prices have been surging up; the overall transaction atmosphere in the yarn market is light, and the price has declined; the yarn dyed fabric market remains weak, with insufficient orders, and the starting rate and capacity utilization rate have slightly decreased, and the product price is stable and weak.  

1. Raw material Market

Since mid July 2020, driven by factors such as the rotation of reserve cotton, the rise of bulk commodities and financial markets, the domestic cotton futures price fluctuated upward and the spot price of cotton rose. On July 13, the average spot price of 3128b cotton in China was 12620 yuan / ton, up 260 yuan / ton compared with the same period last month, with a slight increase. Textile enterprises have actively participated in the bidding since the start of the work of cotton reserve rotation, and the turnover rate of reserved cotton has reached 100%. But the cotton spot market maintains the downturn situation, the overall transaction atmosphere is light. Yarn market as a whole is weak, the purchase and sale is cold, the delivery is slow, and the yarn price continues to fall. The demand of combed pure cotton yarn shrinks obviously compared with that of common combed yarn, the transaction power of high count pure cotton yarn is insufficient, and the inventory of spinning enterprises continues to accumulate; the price of cotton yarn can be negotiated, and the space for local bargaining is large, and some enterprises have approached the edge of loss, and the phenomenon of stopping production is increasing.

2. Yarn dyed Market

Since the middle of July, due to the continuous impact of the epidemic, many foreign brand businesses have been closing stores, and some even applied for bankruptcy protection. With the gradual deepening of the traditional off-season, the yarn dyed fabric market as a whole remains weak, the export market recovery is still slow, the domestic consumer demand is lack of power, the product price is stable and weak, and the profit margin is shrinking. According to the survey, most enterprises are short of orders. The number of orders is less than half of the same period last year. The average opening rate is about 55%, which is 5% lower than that of last month, and the capacity utilization rate is slightly lower than that of last month.

In August, in view of the current off-season market, in order to stabilize employment and ensure continuous operation, most enterprises timely adjust the opening rate of equipment and the working hours of employees, reduce costs and increase efficiency, and relieve business pressure. Based on the continuous stability of the epidemic situation, the continuous recovery of domestic demand, and the acceleration of industrial chain linkage, some of the surveyed enterprises have gradually accelerated the pace of innovation, optimized product structure, orderly layout of the domestic market, deeply participated in the domestic big cycle, actively integrated into the domestic and international dual cycle, made every effort to create new competitive advantages and ensure steady and sustainable development.

3. Future prospects

Recently, the general office of the State Council issued the opinions on further stabilizing foreign trade and foreign investment, which mentioned the need to provide credit enhancement support for foreign trade enterprises in various ways, increase support for labor-intensive enterprises, help large-scale backbone foreign trade enterprises solve problems, and expand online channels for foreign trade. For the future market, the survey enterprises said that the current global epidemic continues to spread, the economic situation is grim and complex, and the recovery of foreign trade market is weak. It is expected that the yarn dyed fabric market will remain weak in the near future, persist in going through the off-season, and expect the market demand to recover as soon as possible.

(the above contents and data are from the sample survey of yarn dyed weaving enterprises for reference only.)