Cotton prices affect small cotton spinning business again
Recently, many small and medium textile enterprises have stopped their orders to stop buying yarn. Since entering since March, compared to the first 2 months, the pace picked up again in the domestic cotton price, cotton price index of the first two weeks in China on the rise 371 yuan / ton, and cotton prices rose last month compared to 4.6%.
It is reported that China Textile Industry Association in March on the part of personnel cluster survey, the survey showed steadily rising cotton prices in mid-March to promote the cotton yarn prices, some smaller, less amount of money companies have to stop orders, no longer buy cotton yarn, one after another parking lot of the loom, operating rates are falling. The second half of last year, as overseas markets began to pick up, cotton textiles and cotton clothing exports surged, businesses began operation was close to saturation.
China's cotton textile industry as barriers to entry lower, margins are thin. Shut down production lines for the part of the current situation of SMEs, an analyst at Guotai Junan Zhang Wei, said, "Cotton prices have gone up faster, rising slowly downstream products, the industry profits have been thin, unable to profit only discontinued."
Zhang Wei said that the ordinary 10% cotton textile enterprise gross margin, net profit margin is only 2-4%, as much amount of money, many small and medium textile enterprises no inventory, all orders received after the purchase of cotton production in the, Today, cotton prices rose, they did not dare pick one up, afraid to drop it in his hand. The face of rising cotton prices, a single-do textile processes, the affected will be relatively large, but there are differences, brand, channel, and high added value, a certain stock companies should be stronger in this capacity.
"Definitely will affect the profits of textile enterprises." Huatai joint analyst Wang Rong said that the company can lock in various ways by the cost or raise prices to the downstream. "Over time, upward pressure on cotton prices is expected from the textile and garment enterprises to transfer, but the transfer rate will vary, depending on whether the company competitive advantage."
SMEs need to make some response to the market, the market reaction will be linked, but there is a process. Not only the Chinese cotton production cuts, the U.S. cotton crop last year, not as in previous years, while the last two years, China's cotton imports, India's second largest country of origin, but also control the export quantity, to ensure that their demand for cotton spinning enterprises.
It is reported that China Textile Industry Association in March on the part of personnel cluster survey, the survey showed steadily rising cotton prices in mid-March to promote the cotton yarn prices, some smaller, less amount of money companies have to stop orders, no longer buy cotton yarn, one after another parking lot of the loom, operating rates are falling. The second half of last year, as overseas markets began to pick up, cotton textiles and cotton clothing exports surged, businesses began operation was close to saturation.
China's cotton textile industry as barriers to entry lower, margins are thin. Shut down production lines for the part of the current situation of SMEs, an analyst at Guotai Junan Zhang Wei, said, "Cotton prices have gone up faster, rising slowly downstream products, the industry profits have been thin, unable to profit only discontinued."
Zhang Wei said that the ordinary 10% cotton textile enterprise gross margin, net profit margin is only 2-4%, as much amount of money, many small and medium textile enterprises no inventory, all orders received after the purchase of cotton production in the, Today, cotton prices rose, they did not dare pick one up, afraid to drop it in his hand. The face of rising cotton prices, a single-do textile processes, the affected will be relatively large, but there are differences, brand, channel, and high added value, a certain stock companies should be stronger in this capacity.
"Definitely will affect the profits of textile enterprises." Huatai joint analyst Wang Rong said that the company can lock in various ways by the cost or raise prices to the downstream. "Over time, upward pressure on cotton prices is expected from the textile and garment enterprises to transfer, but the transfer rate will vary, depending on whether the company competitive advantage."
SMEs need to make some response to the market, the market reaction will be linked, but there is a process. Not only the Chinese cotton production cuts, the U.S. cotton crop last year, not as in previous years, while the last two years, China's cotton imports, India's second largest country of origin, but also control the export quantity, to ensure that their demand for cotton spinning enterprises.
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