In May, Inside And Outside The Cowboy Market Is Insufficient, And Enterprises Should Actively Respond.

In May 2020, domestic cotton spot prices rose, the price of denim yarn continued downward, indigo dye prices were relatively stable, the downstream brands of export markets had sporadic orders, the domestic market started slowly, the production orders of denim enterprises were generally insufficient, and the profits were low.

Raw material Market

Since May, domestic cotton spot prices have risen sharply under the impetus of futures. In May 20th, the spot price of domestic 3128B grade cotton was 12045 yuan / ton, up 335 yuan / ton from the same month last month. Affected by weak demand from downstream market, the purchase price of denim with pure cotton yarn from OEC10 and C10 decreased to about 500 yuan / ton compared with the same period last month. The average price of indigo dye is about 39000 yuan / ton, which is basically the same as last month. According to indigo dye manufacturers, the price of indigo dye has been reduced by about 2000 yuan per year compared with the beginning of the year. In order to maintain a balance between sales and profits, the price is expected to remain stable in the near future.

Denim Market

From the production point of view, up to May 20th, more than half of the key denim enterprises in Shandong, Hebei, Jiangsu, Zhejiang and Guangdong had more than 70% capacity utilization.

From the export market, orders are showing signs of recovery. According to the survey, some clothing brands in Europe and the United States recently asked the denim enterprises to start a number of orders suspended and postponed before the outbreak of the epidemic. These orders accounted for more than 80% of the total online production orders. After the outbreak, the new orders were less than 20%, with small batch as the main player, and the profits were relatively thin, and the corporate payment cycle was extended, and accounts receivable increased. The major developed countries in Europe and America are tentatively resumed and resumed production, which has played a certain role in promoting the operation and recovery of clothing trade.

From the domestic market, the market is still in a slow recovery. 80% of the denim enterprises surveyed showed that the downstream inquiry enterprises and small batch orders increased by 10% compared with the same period last month, and the domestic market has started signs. China's backbone denim manufacturers mostly sell in the international market, and have encountered some difficulties in opening up the domestic market. Enterprises can only reduce sales in order to maintain cash flow, so as to ensure the normal operation of enterprises. In addition, enterprises actively respond to operational crisis through innovative ways of selling goods, online marketing and Internet exhibitions.

Outlook for the future

From the market situation, the downward pressure on the global economy continues to increase, and the consumption market of traditional developed economies such as Europe, America and Japan has shrunk dramatically. Denim enterprises generally believe that we need to make long-term preparations for the sluggish external demand. At the same time, as China's residents' income growth and electricity providers continue to exert themselves in the sinking market, the domestic consumer market is rising and has great potential. How to fully tap the potential of domestic demand has become the key to the survival and development of enterprises.

The above contents and data are from a sample survey of denim enterprises, for reference only. Welcome to forward, please indicate the source: China Cotton Textile Industry Association.