According to the Commodity Market Analysis System of Shengyi Society, the price trend of cotton yarn in the market has been stable this week, showing a characteristic of clear stability and hidden decline. As of May 23rd, the spot price of 21S pure cotton ring spinning in Shandong Province, China is around 22265 yuan/ton, which is the same as last week; The spot price of 32S pure cotton ring spinning is estimated to be around 23775 yuan/ton, unchanged from last week.
Market Overview: The cost of textile enterprises continued to increase this week, but after a round of price adjustments last week, downstream acceptance was limited and purchases were cautious. In addition, the number of new orders from textile enterprises was limited, and the off-season in the market was obvious. It was difficult for yarn prices to continue to rise, but the price trend remained stable. The current pace of cotton yarn shipments remains relatively balanced, with prices showing a clear, stable, and downward trend. Downstream textile factories adopt a procurement strategy guided by order demand, taking goods on demand, and maintaining a cautious and wait-and-see attitude in the medium to long term.
Startup situation: Downstream demand is limited, and this week’s orders from textile enterprises are still mainly small and short, with fewer large and fresh orders. The startup rate of textile enterprises has slightly decreased, with about 90% of Xinjiang textile enterprises starting up and 60-70% starting up in mainland China. As of May 22, the startup load of mainstream textile enterprises in China was 74.5%, a decrease of 0.13% compared to the previous month.
Inventory situation: The favorable release of tariff reduction has boosted market confidence in the short term, leading to the restart of some terminal orders. However, new orders have not yet been reflected, and some textile enterprises have slightly accumulated inventory. Some large factories in Xinjiang have inventory for about 30 days, while mainland enterprises have inventory for about 15-20 days. As of May 8th, the yarn inventory of major regional textile enterprises was 29.3 days, with a weekly decrease of 1.68%.
Cost wise: Cotton prices have risen this week. Based on the current domestic cotton inventory and next season’s planting expectations, the short-term macro will continue to boost cotton prices. In the future, we still need to pay attention to the fundamental changes after entering the off-season. It is expected that the cotton price range will fluctuate in the coming week, with spot prices remaining at 14250-14600 yuan/ton.
Weak demand: The cotton fabric market continues to operate weakly. The sluggish terminal demand has led to weak order taking by textile factories, resulting in a shortage of new orders in both domestic and foreign markets. Currently, small and multi batch orders are the main focus, and the production proportion of conventional varieties has increased. Affected by the imbalance between production and sales, the inventory of raw fabric has shown a slow accumulation trend. Some weaving factories have reduced their operating loads and generally adopted a cautious strategy of “buying as needed”.
Market forecast: The upward trend in cotton prices has squeezed the immediate profit margin of textile enterprises, coupled with the arrival of the off-season in the cotton yarn market, resulting in the accumulation of finished product inventory risks, leading to a lack of upward momentum in yarn prices. In the short term, prices are likely to remain stable and difficult to fluctuate significantly. If there is no significant improvement in demand from downstream weaving factories, it cannot be ruled out that yarn prices may continue to decline.
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