What are the factors that affect the price of cotton yarn?

What are the factors that affect the price of cotton yarn? Let's introduce it.

 
Analysis of factors influencing price
1. Value factor analysis
(1) Raw material cost
As the main raw material of cotton yarn production, the cost of cotton accounts for about 70% of the cost of cotton yarn, and its price change will directly affect the profitability of the cotton spinning industry. Through the analysis of cotton and cotton yarn price index released by China Cotton Textile Industry Association from 2010 to 2015, it can be seen that the price index correlation between 32 combed cotton yarn and 3128 grade cotton is 0.97, and there is a high correlation between cotton price and cotton yarn price. However, there are many factors affecting the cotton market price at home and abroad, including output, import and export volume, consumption, inventory, purchase and reserve policy, import and export policy, weather and market development of substitutes.
(2) Labor cost
Labor cost factors mainly include labor cost factors and power cost factors such as water, electricity and gas. Combined with the labor cost of large and medium-sized cotton textile enterprises in recent years, in order to analyze the trend of product profit, the cost of cotton yarn labor is usually calculated at 5000-5500 yuan / ton, accounting for 15% - 20% of the cotton yarn price. Among them, labor cost is an important factor affecting cotton yarn production cost accounting, accounting for about 15% of cotton yarn cost, while power cost factors such as water, electricity and gas account for about 10% of cotton yarn cost.
(3) Three expenses
The three cost factors mainly include financial expenses, management expenses and operating expenses. Among them, on the one hand, financial expenses refer to the influence of loan interest rate on the profitability of textile enterprises, which depends on the adjustment of national financial policies; on the other hand, it refers to the influence of capital occupation on the formation of cotton yarn price of textile enterprises. Management cost mainly refers to the cost of production management, process management, equipment management and technical input of textile enterprises. Operating expenses refer to the expenses incurred in the process of selling products and providing labor services, as well as the expenses of special sales agencies.
(4) Taxes and profits
Tax factors mainly include value-added tax and export tax rebate. According to the current value-added tax system, the deduction tax rate of cotton purchase is 13%, the output tax rate of cotton textile is 17%, and the tax difference of 4% is borne by the enterprise; in recent years, the industry association has attached great importance to the problem of "high levy and low deduction", and many provinces have tried different tax deduction policies to enhance the international competitiveness of China's cotton textiles.
At present, China's cotton yarn export tax rebate rate maintains the level of 16% in April 2009. The most direct benefit is to increase the income of export tax rebate, reduce the cost of export operation, reduce the tax burden of enterprises and improve the competitiveness of products. According to the preliminary calculation, for textile enterprises, if the export tax rebate rate of textiles and clothing increases by one percentage point, the value-added tax will be refunded by about 0.06 yuan if the export is 1 dollar.
As the cotton textile industry is a completely competitive industry, the average profit margin of China's cotton textile industry is low. In recent years, the national cotton reserve policy has led to a huge difference in cotton prices at home and abroad, which has affected the profitability of cotton spinning enterprises to a certain extent. According to the spot market research, since 2011, most of the small and medium-sized enterprises producing low count cotton yarn are in a state of loss.
2. Analysis of supply and demand factors
(1) Supply factors
Supply factors mainly include domestic and foreign market inventory, current production and import. It can be divided into: inventory changes of major textile enterprises, production capacity changes of major cotton spinning bases (including new start-up, capacity transfer, etc.), changes in operation and output of major textile enterprises, changes in industrial policies of main producing areas and cotton yarn import and export of main sales areas, etc.
(2) Demand factors
Demand factors mainly include domestic and foreign market consumption, export volume and ending balance. It can be divided into: Domestic Residents' income status, changes in consumer purchasing power and consumption structure, changes in the state's policies to encourage consumption, changes in inventory in major cotton yarn consumption areas, changes in the trend of downstream market trends, production and inventory changes in major exporting countries, etc.
Furthermore, the factors that cause the supply and demand of cotton yarn market to fluctuate mainly include the macroeconomic situation at home and abroad, the development of cotton spinning Market and the development of substitute industry. Among them, the macroeconomic trend can have a direct impact on the demand for cotton yarn, thus affecting the price of cotton yarn. The financial crisis in 2008 had a profound impact on the major economies of the world. The rapid shrinking demand for cotton yarn at home and abroad, the high inventory of cotton textiles and the tightening of financing credit in the industry had a negative impact on the production and operation of cotton spinning enterprises, and the price of cotton yarn showed a downward trend in the same period. In 2010, with the moderate recovery of domestic and foreign economy, the rapid growth of domestic and foreign demand, and the continuous improvement of consumption structure, played a positive role in promoting the development of the textile industry, and cotton yarn prices showed a steady upward trend in the same period. In 2011, affected by the European debt crisis and the fall of cotton prices, cotton yarn consumption demand weakened, and the development of China's cotton textile industry fell into difficulties again, and cotton yarn prices went down all the way. In 2013, with the further easing of the European debt crisis, the domestic and foreign consumption environment turned better again, and the cotton yarn price stopped falling and became stable. Therefore, from the perspective of supply and demand, the sustained improvement of macro-economy can directly stimulate the demand for cotton yarn, thus enhancing the stability of cotton yarn price rise.
In recent years, the development of domestic and foreign cotton spinning market has more and more influence on China's cotton yarn supply and demand. With the advantages of technology, brand and supply chain integration, developed countries always occupy the initiative position in the high-end cotton yarn market. It is difficult for China's cotton textile products to seize the international high-end market share. In recent years, developing countries, such as India, Pakistan and Southeast Asia, have been committed to developing the cotton textile industry chain, continuously strengthening the investment and construction of the textile industry and policy support for the textile industry. Due to the extremely low international competitiveness of their cotton textile products and clothing and the limited demand for cotton yarn in the local market, most of the cotton yarn products are sold abroad with low raw material prices and The advantage of low labor cost gradually erodes the domestic and foreign market share of China's low-end cotton yarn. The domestic sales of low-end cotton yarn are stagnant, and the spot inventory is high, so the price of cotton yarn is weak.
In addition, the development of substitute industry is also an important factor affecting the supply and demand of cotton yarn in China. With the progress of production technology, the cotton textile industry continues to develop and research new products. There are more and more types of cotton yarn substitutes, and the substitution effect is more and more obvious. Market data show that the production capacity of China's cotton textile industry has increased by 50% in the past six to seven years, and the total cotton consumption has decreased by 18% in the same period. Although the development of cotton yarn substitute industry has become one of the effective ways to get rid of the current development dilemma, the development of cotton substitute industry will inevitably cause changes in the supply and demand of cotton textile products, resulting in the fluctuation of cotton yarn price.
3. Other factors
The formation of cotton yarn price is affected not only by value factors and supply and demand factors, but also by many other factors, such as the intervention of the government or industrial organizations (such as anti-dumping and anti subsidy policies), consumers' psychology and consumption habits (such as buying up but not falling), national culture, enterprise culture or product image.
        

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