How can textile companies still worry about raising yarn prices?

On October 12, a certain person in Shandong Mr. Yu, the owner of a textile company, said that cotton yarn prices will be raised across the board today. Among them, the prices of carded 21S, 32S, and 40S are 19,300 yuan/ton, 21,200 yuan/ton, and 23,300 yuan/ton respectively, rising by 300-400 yuan/ton. Not only that, their factory has also raised the prices of some open-end spinning and combed yarns, with an increase of about 200 yuan/ton. The person in charge said that the recent “Golden Nine and Silver Ten” period is a good sales season of the year.

In fact, not only some textile companies in Shandong have raised product prices, but many textile companies in Hebei, Jiangsu, and Zhejiang are also raising prices, or are eager to try. Why the increase? The person in charge of a textile company in Jiangsu said that the cost of raw materials has risen rapidly recently, and employees sent to Xinjiang to order cotton reported that the prices were ridiculously high. Most of the quotations for grade 3128 cotton in Aksu, Kashgar and other places are around 16,000 yuan/ton. “If new cotton is used, the cost will increase by 1,000-2,000 yuan/ton. If the price of cotton yarn is not raised, we will definitely lose money in the future.” The person in charge said. Second, the cotton yarn transaction has really improved, especially carded and combed 32S and 40S. Most textile companies can maintain 100% operation, and the inventory of finished products has also remained low.

Although textile companies have raised yarn prices and some yarn sales are acceptable, what are textile companies still worried about? On October 11, a manufacturer in Gaoyang, Hebei Province said that the credit situation downstream is very serious. Taking their factory as an example, they mainly produce air-end spinning 10-16S, carded 21S, and 32S. As of now, the inventory of finished products is only 11-12 days. The current downstream credit payment is close to 10 million yuan. Nowadays, companies have to purchase raw materials. question. “If we can’t recover the payment, we will have to close down the business,” the person in charge said. Many local printing and dyeing, fiber, and cotton yarn companies have experienced “triangular debt” problems, causing some manufacturers to be unable to operate normally. A textile company in Shandong also reported the problem of financial constraints. The person in charge said that now is a critical period for replenishing raw materials. Due to financial constraints, raw materials cannot be purchased normally, and they are particularly anxious.

It is understood that the key factor for corporate capital shortage is the serious backlog of downstream natural cotton and workwear products, especially workwear companies. Since 2015, many workwear companies have been unable to cash in due to export restrictions on products, especially in Fujian, Guangzhou, Many workwear companies in Shanghai and other places have closed down and their bosses have fled. For some companies that are gritting their teeth, many of last year’s old models are backlogged in warehouses and cannot be sold, placing a heavy burden on the upstream.

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