According to the commodity market analysis system of SunSirs: After the May Day holiday, although the sales of low-count cotton yarn have slightly recovered, the overall situation is still sluggish. The market demand has intermittent characteristics, and it is difficult for orders to form a sustained and stable growth trend. As of May 9, the spot reference price of 21S cotton ring spinning in Shandong Province was around 22,265 RMB/ton, the same as before the holiday; the spot reference price of 32S cotton ring spinning was around 23,775 RMB/ton, the same as before the holiday.
Market Overview: After the holiday, although the sales of low-count cotton yarn have slightly recovered, the overall situation of the cotton yarn market is still sluggish. With the advent of the traditional sales off-season, market demand has intermittent characteristics, and orders are still dominated by small and short orders, making it difficult to form a sustained and stable growth trend. The purchasing enthusiasm of downstream enterprises continues to be sluggish, and the wait-and-see sentiment is strong. In order to prevent inventory pressure, enterprises have a positive attitude towards shipment, and the actual transaction price of yarn has been slightly reduced.
Start-up situation: Due to limited downstream demand, some small and medium-sized textile enterprises have adopted rotation and staggered start-up to reduce the inventory of finished products. The start-up rate is basically stable. Xinjiang textile enterprises are about 90% in operation, and the mainland is 60-70% in operation. As of May 8, the start-up load of textile enterprises in mainstream regions was 74.4%, which was the same as before the holiday. It is expected that the start-up rate may be reduced next week.
Inventory situation: With the end of the holiday, downstream customers began to gradually release demand, and some orders were issued one after another, mainly small orders for re-orders. However, the overall domestic and foreign market demand is still weak compared with the same period last year. The inventory of some large factories in Xinjiang is about 35 days, and that of mainland enterprises is about 20 days. As of May 8, the yarn inventory of textile enterprises in major regions was 29.3 days, a weekly decrease of 1.68%.
Cost side: Foreign cotton rose and fell this week, while Zheng cotton fluctuated and was strong. In terms of spot market, there are insufficient new orders from downstream after the holiday, weak willingness to replenish inventory, fewer market inquiries, and strong expectations for a significant weakening of domestic consumption in the later period. Zheng cotton is under obvious pressure, and it is expected that the cotton price range will fluctuate in the next week.
Weak demand: The cotton grey cloth market continues to operate weakly. Weak terminal demand has led to a lack of orders from weaving mills, and new orders from domestic and foreign markets are insufficient. Currently, small batches and multiple batches of orders are the main ones, and the production ratio of conventional varieties has increased. Affected by the imbalance between production and sales, the inventory of grey cloth has shown a slow accumulation trend, and some weaving mills have reduced the load of the machine. The price system remains stable, but there is room for negotiation in actual transactions. With the arrival of the traditional off-season, weaving mills generally adopt a cautious strategy of "buy as you use".
Market forecast: With the end of the traditional sales peak season of "Golden March and Silver April", the market has entered the off-season of demand, and the current cotton yarn market order situation has become more and more confusing. Affected by this, all sectors of the industry lack confidence in the future market and generally adopt a cautious wait-and-see attitude. From the price perspective, although the surface price of cotton yarn remains stable, there is actually a hidden downward trend. Based on this, it is expected that the upward trend of cotton yarn prices will be blocked in the short term, and the subsequent price trend will largely depend on the speed and degree of digestion of finished product inventory during the off-season.
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