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Gray Fabric Market: Production And Marketing Pressure Consumption Worrying

Apr. 15, 2020

Since March 2020, domestic and foreign cotton futures, spot prices significantly lower, cotton yarn, grey cloth prices under pressure, followed by a decline.

Affected by the suspension and cancellation of export orders, the situation of insufficient orders and cold sales in late march has become prominent. Inventory has been increasing day by day. Some smaller enterprises have reduced production stops, and the capacity utilization rate has decreased compared with early march.

1. Raw material market

March, outside the epidemic spread rapidly under the influence of negative factors, such as global commodities fell into the channel, zheng cotton futures fell sharply, cotton spot price month by more than 2000 yuan/ton, April 9, 3128 b cotton spot price 11350 yuan/ton, FangQi procurement, market sporadic clinch a deal, the recent cotton prices remain low volatility.

The cotton yarn market in early march sales situation is good, since the latter half of the market overall transaction has become weak, the price continues to fall, the price of conventional varieties than the same period last month fell about 1300 yuan/ton, enterprises are more willing to cut prices and shipping, the actual transaction can be discussed, the high yarn market is relatively good, some areas of sales is ok.

It is understood that most of the current spinning enterprises still maintain normal production, yarn inventory is mostly in a month or so.



2. Grey fabric market

In late march grey market as a whole marketing cold and cheerless, enterprise order compression, pressure especially export business, enterprises face a ready order suspend shipment even cancellations, insufficiency of subsequent orders, exports market or to the domestic enterprises through the transfer market and promote production, in order to reduce the impact of the epidemic.

Starts from the whole, production and marketing, enterprises has increased, but the capacity utilization rate compared with the early march, in the face of weak market demand, companies cut production increase, the product sale slowly, causing the accumulation of inventory, most of today's business inventories in 1 months or so, part of the export business inventories in 2 months or so.

In terms of orders, some orders of large enterprises can be arranged until the end of April or even may. Orders of small enterprises are in short supply, and they are mainly intermittent orders. In order to maintain normal operation, they are forced to increase the output of conventional varieties.

In terms of price, the price of most products fell by 0.2-0.5 yuan/ton compared with the same period last month, the market inquiry and procurement continue to reduce, the actual transaction still has room for discussion, classification, clothing gray cloth pressure is greater, home textile gray cloth is relatively good.

In terms of benefits, into the late march, the grey fabric market continues to weaken, most varieties have fallen to the early rise, the enterprise is basically in a state of no profit, some enterprises even loss.

3. Future outlook

The current international epidemic situation is severe. The latest report released by the United Nations department of economic and social affairs predicts that the global economy will shrink by 0.9% in 2020 due to COVID 19.

In the face of the severe situation of foreign trade, Chinese premier li keqiang presided over a regular meeting of the state council on April 7 to launch a series of measures to stabilize foreign trade, actively respond to the impact of the epidemic, and continue to implement partial tax support policies for inclusive finance and small-loan companies to help smes tide over the difficulties.

The whole, the current epidemic is still in the fermentation, the influence of global unemployment soared, so at the end of march to unemployment insurance in the United States has the total number of more than 2009 years of history to rising unemployment will further restrain the consumption demand of textile market, the domestic market at the same time new weak demand, shifted under pressure, the enterprise capital turnover are in trouble, hope that Banks and other financial institutions can we will increase support for textile enterprises, to ensure normal production and operation of the enterprises.

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+86 153 8339 4852