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[cowboy market] it will take time for the industry to recover from the traditional off-season

In the past month, the spot price of domestic cotton fluctuated and rose, the price of denim yarn continued to decline, and the price of indigo dye was relatively stable; the market demand was weak, and the production orders of denim enterprises were generally insufficient, and the profit was relatively low.

1. Raw material Market

Since the beginning of May, the spot price of domestic cotton has been rising driven by the continuous improvement of epidemic situation in most countries and the overall recovery of bulk commodities. On June 19, the spot price of domestic 3128b cotton was 12210 yuan / ton, up 165 yuan / ton compared with the same period last month. The average opening rate of the investigated denim enterprises is about 70%, but affected by the weak demand of the downstream Denim Market, 80% of the enterprises said that the delivery is slow, the yarn inventory is kept for about one and a half months, and the enterprises have strong sales willingness to yield profits. Taking oec10 and C10 English pure cotton yarn as an example, the delivery price has been reduced to different degrees compared with the same period last month. Among the investigated enterprises that produce indigo dyes, the average ex factory price of indigo dyes is about 39000 yuan / ton, which is basically the same as that of last month. 50% of the enterprises reported that the sales volume of dyes was slightly lower than that of last month.

2. Denim Market

From the production situation, as of June 19, the capacity utilization rate of key denim enterprises in Shandong, Hebei, Jiangsu, Zhejiang and Guangdong remained at 60% on average. Less than 10% of the orders in online production are newly added. Most enterprises actively explore the market, adjust product positioning and strive to achieve stable operation.

From the perspective of the export market, some survey enterprises reported that in late May, they received a small number of orders from the United States in succession, and the number of inquiries from some brands increased, which may be a sign of the gradual recovery of the U.S. economy. However, the outbreak of social unrest swept across the United States resulted in a significant decline in the number of orders and no significant improvement in European orders.

From the perspective of domestic market, with the gradual recovery of social and economic order in China, the number of domestic clothing brands has increased. Denim enterprises generally focus on expanding the domestic market, actively connect with clothing brands and traders, and maintain business stability.

3. Future prospects

From the perspective of market situation, there are still huge uncertainties in the development of global economy, and it is difficult for the export market to improve greatly in the short term; from the perspective of the domestic market, it will take a while for the potential of domestic demand to be fully released. At present, the normal off-season of the market is coming, and there are further signs of weak demand. It is expected that the pressure of enterprises will continue to increase in June and July. Enterprises call on the upstream and downstream of the industrial chain to establish a business ethics of abiding by commitments and performing in good faith, and hope that the state and relevant departments can continue to implement more policies to boost the consumer market