China Cotton Network Special News: According to feedback from small and medium-sized cotton spinning mills in Henan, Shandong and other places, cotton spinning mills feel at a loss due to the sharp decline in Zheng cotton since mid-July. The frequency of cotton yarn quotation adjustments cannot keep up with the frequency of cotton price declines.
In addition, cotton futures have fallen sharply, and cotton yarn pricing has also encountered relatively big problems. On the one hand, downstream cloth mills and fabric companies have very few inquiries, and they are all in a wait-and-see state, with transactions almost at a semi-stagnant level; on the other hand, the cost of stored cotton It is obviously on the high side. The price of cotton yarn produced in the short term cannot be reduced, and the quotation will lead to the loss of customers. Therefore, in the past week or so, cotton spinning mills have closed their orders for cotton yarn, while old customers negotiate one by one, and the yarn price is adjusted based on the spot price of cotton on the day or half a day.
It is worth noting that due to the recent continuous plunge in Zheng cotton and ICE futures prices (the FOB/CNF/CIF quotations of cotton yarns from India/Vietnam/Pakistan and other origins have been significantly reduced), some cotton spinning mills have reported that the prices signed in the early stage Cotton yarn supply contracts may be unable to be executed, and the phenomenon of purchasers delaying performance, negotiating to cancel the contract, or even directly breaching the contract has increased significantly. Some cotton yarn contracts are suspended by the buyer halfway through execution, so the inventory accumulation rate of most yarn mills has increased compared with May/June. , cash flow continues to tighten.
A 60,000-spindle yarn factory in Jiaozuo, Henan said (its flagship products have always been high-end 40S, high-end 32S, and high-end 26S pure cotton yarn). In the past half month, customers in Foshan, Guangdong, Shaoxing, Zhejiang and other places have significantly reduced inquiries and delivery compared to June. , the company's delivery has also been adjusted from the previous "one vehicle every 2 days to one vehicle every 3-4 days", and the pressure on working capital has increased. The company plans to reduce production capacity by 20%-30% (employee rotation) from late July to early August. On the one hand, it will reduce the risk of rising cotton yarn costs caused by peak electricity consumption; on the other hand, it will avoid the risk of capital chain rupture due to credit tightening. risk.
