Zheng Mian Comes Back To The Decline, And The Phenomenon Of Stopping Production And Limiting Production Increases

On June 17, Zheng Mian Futures continued to usher in a new round of decline. On June 18, the minimum of the main contract of Zheng Mian was 14340 yuan/ton, hitting a new low in nearly six months. Although the main force of Zheng Mian rebounded slightly on June 19 and 20, the main contract fell 15 yuan to 14560 yuan/ton on June 21. At present, the sentiment of market bias is spreading, and the cotton price is difficult to say the bottom.

　　 The phenomenon of stopping production and limiting production of cotton mills has increased

Since June, the startup rate of textile enterprises has continued to decline. At present, the startup rate of large factories above the designated size has maintained about 80-90%. Some large factories still have plans to reduce the startup rate, and small and medium-sized cotton mills have increased production halts and restrictions.

At present, the cotton yarn inventory of textile enterprises has been on the high side, the immediate processing loss of cotton yarn has narrowed, and the weak downstream demand is still the main contradiction of the industry. The continuous decline of Zheng Mian has caused greater pressure on ginning plants, and the spot profit of medium and low quality cotton has been slightly reduced. With the deepening of the off-season market, downstream demand is difficult to release, which has limited support for the current cotton price.

With the continuous decline of international cotton prices in recent days, the quotation of imported cotton yarn also fell.

However, the selling price of yarn traders is lower than that of textile enterprises, and the goods are still not smooth. The current downstream market has obvious off-season characteristics, the total amount of terminal demand orders continues to be insufficient, and the pressure on the entire cotton textile industry chain continues to accumulate.

　　 Jiangsu textile enterprises adjust management strategies

Recently, the relevant institutions found that the operating rate of most textile enterprises in Jiangsu generally remained high. In the face of fierce market competition and declining cotton prices, each textile enterprise actively adjusted its business strategy in combination with its own characteristics and market demand, and achieved steady operation and a slight profit. Through communication with textile enterprises, we learned that the operating characteristics of Jiangsu textile enterprises are as follows:

First, fully understand the market, grasp the industrial cycle, and timely adjust the business scale. The person in charge of the textile enterprise not only understands the current downstream order volume and demand, but also can timely and accurately obtain the upstream and downstream information of the industry and adjust the business strategy in time according to the characteristics of the enterprise.

The second is to strictly control the cost of cotton consumption and realize stable operation. The interviewed enterprises all said that cotton cost is the key to profit and loss, but each enterprise has slightly different ways to control the cost of raw materials. Textile enterprises with less than 50000 spindles are more flexible in operation, and adopt the method of post pricing to control the cost of cotton consumption. The enterprises with the scale of more than 100000 ingots, through the analysis of the market situation, choose the opportunity to buy in batches in the spot market when the price is low, so as to minimize the cost and achieve profitability.

The third is to achieve differentiated development. Jiangsu textile enterprises all avoid producing similar products of Xinjiang cotton yarn. The person in charge of the enterprise has very clear market positioning. For example, textile enterprises with relevant technical backbones make full use of existing equipment to produce different types of yarn, including core spun yarn, multi count blended yarn, etc. By introducing advanced equipment, textile enterprises with sufficient funds can save millions of labor costs every year, improve production efficiency and product quality, and reduce operating costs.

On the whole, the cotton supply side is relatively abundant. The weather in Xinjiang's main cotton producing areas is stable, and the cotton supply increment is still expected to be strong in the new year. Downstream textile off-season market continued to deepen, textile enterprises' start-up rate declined, finished product inventory increased, cotton digestion capacity tended to weaken, market destocking pace was slow, and weak demand was still the key factor to suppress cotton price rebound. Under the pattern of weak supply and demand, domestic cotton prices will continue to operate in a weak and volatile manner in the short term, and the bottom is still difficult to determine. The weather conditions in the main cotton producing areas in the later period and the performance of downstream orders will be the main concerns affecting the operation of the domestic cotton market.