According to the commodity market analysis system of SunSirs: the cotton yarn market price trend was stable this week, and the price showed the characteristics of stable and falling. As of May 23, the spot price of 21S cotton ring spinning in Shandong Province was about 22,265 RMB/ton, the same as last week; the spot price of 32S cotton ring spinning was about 23,775 RMB/ton, the same as last week.

Market overview: The cost of textile enterprises continued to increase this week, but after a round of price adjustments last week, the downstream acceptance was limited and they were cautious in purchasing. In addition, the new orders of textile enterprises were limited, the market was obviously off-season, and it was difficult to continue to increase the yarn, and the price trend was stable. The current cotton yarn shipment rhythm remains relatively balanced, and the price shows the characteristics of stable and falling. The downstream weaving mills' procurement strategy is guided by order demand and takes goods on demand. In the medium and long term, most of them maintain a cautious wait-and-see attitude.

Start-up situation: Downstream demand is limited. This week, textile orders are still dominated by small and short orders, with few large orders. The start-up rate of textile enterprises has been slightly reduced. Xinjiang textile enterprises are about 90% in operation, and the mainland is 60-70% in operation. As of May 22, the operating load of textile enterprises in mainstream regions is 74.5%, a decrease of 0.13% month-on-month.

Inventory situation: The release of the favorable tariff reduction has boosted market confidence in the short term, allowing some terminal orders to restart, but new orders have not yet been reflected. The inventory of some textile enterprises has accumulated slightly. The inventory of some large factories in Xinjiang is about 30 days, and that of mainland enterprises is about 15-20 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: Cotton prices rose this week. Judging from the current domestic cotton inventory and the planting expectations for the next season, the short-term macroeconomic situation will continue to boost cotton prices. The market outlook still needs to pay attention to the changes in fundamentals after entering the off-season. It is expected that the cotton price range will fluctuate in the next week, and the spot price will remain at 14250-14600 RMB/ton.

Weak demand: The cotton grey cloth market continues to operate weakly. Weak terminal demand has led to a lack of orders for weaving mills, and new orders in both 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. Some weaving mills have reduced the load of the machine and generally adopted a cautious strategy of "buy as you use".

Forecast for the future market: The upward trend of cotton prices has squeezed the immediate profit space of yarns of spinning companies. In addition, the off-season of the cotton yarn market has arrived, and the finished product inventory faces the risk of accumulation, resulting in a lack of upward momentum for yarn prices. In the short term, the price is likely to remain stable and it is difficult to have significant fluctuations.

If the demand of downstream weaving mills does not improve significantly, the possibility of continued downward movement of yarn prices cannot be ruled out.

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