Cotton Demand Will Continue To Deteriorate And Cotton Demand Differentiation Will Increase.

Towards the end of this year, look back this year.

Market, no matter 7 or August.

Cotton production and quality caused by high temperature double drop, or domestic and foreign cotton prices continue to narrow, can not prevent new cotton prices down.

The key points are yarn and terminal.

The demand for clothing is down.

Yarn consumption is controlled by cotton quality, chemical fiber substitution and imported yarn competition.

Textile industry upgrading, product mix adjustment, and cotton demand differentiation.

At present, the quality and output of high-quality cotton produced by the domestic market has been reduced by 28 or more. As of now, 28-32mm accounts for only 73.96% of the total cotton in the new cotton market. The C2 level accounts for 38.53% of the total, compared with 86.37% and 14.68% last year.

Due to industrial upgrading and product mix adjustment, mainstream textile products are becoming more and more popular in combing. The demand for quality cotton is increasing and the sale of inferior cotton is narrowed.

In addition, as the quota of cotton imports continued to limit 894 thousand tons, the difference between domestic and foreign cotton prices continued to shrink. As of last Friday, the price difference between the CCI index 3128B and the FCI index M class 1% tariff was only 1329 yuan / ton, and the advantage of foreign cotton prices declined.

Therefore, the domestic limited high-quality cotton is used in the production of high yield and better varieties, inferior cotton supply exceeds demand, and the cotton demand differentiation is obvious.

The cost of chemical fiber has dropped dramatically, and fast fashion has become the mainstream.

Taking polyester staple as an example, its price trend has been significantly affected by the drop in international crude oil prices. The price of polyester staple fiber has fallen below the 2008 low point and continues to be explored. The pure polyester yarn stock pressure has increased, and price promotions are widespread. The price difference between cotton and polyester has risen from 5400 yuan / ton in early May to the current 6600 yuan / ton. Polyester staple fiber has increased the substitution of cotton, and blended yarn has become the choice of textile enterprises.

In addition, the fast fashion clothing brand is favored by consumers. Compared with the traditional slow fashion apparel, the proportion of chemical fiber material in the fabric is very high, which is also one of the reasons for the shrinking of cotton consumption.

Import yarn growth is expected to slow down, but is still growing.

Imported yarn has explode since 2012, and jumped from 903 thousand tons in 2011 to 1 million 526 thousand tons in 2012. In 2015 1 to November, the number of imported yarn has reached a record high of 2 million 159 thousand tons.

The price advantage of imported yarn on the one hand is low labor cost from raw material cotton and textile enterprises, on the other hand, it benefits from the currency depreciation of exporting countries.

In the future, the depreciation of RMB is a great probability. As the difference between domestic and foreign cotton prices is further narrowed, the cost of imported yarn raw materials will decrease, but the labor cost of Southeast Asian textile enterprises will be significantly lower than that of China in the long run.

At the same time, the composition of imported yarn exported to China is changing. The proportion of combed yarn in imported yarn has been increasing. In 2015, the proportion of combed yarn has remained above 20%. Similarly, the proportion of 30-47 combed yarn in imported combed yarn is also increasing, especially in 30-47 of the combed yarn exported to China in India. The proportion is 67%.

It can be speculated that the imported yarn will further encroach on the market share of high count combed yarn in China, and the situation that imported yarn has fully occupied the domestic yarn market has come quietly.

Textile and clothing consumption enters the cold winter period

Since 2010, China's clothing production and textile clothing, clothing industry sales revenue, profit growth year-on-year growth indicators and other indicators continued to decline, and finished goods inventory rose sharply, the stock value from early 2010 of 42 billion yuan, an increase of nearly 1.5 times, to the end of October this year reached 103 billion 500 million yuan.

In terms of exports, the export volume of clothing exports in China slowed down after 2011. In 2015, except for February, other months showed a negative growth year-on-year, and the proportion of chemical fiber clothing increased in garment exports, and the negative growth of cotton knitted garments, and the growth rate of cotton woven garments was far behind that of woven fabrics.

Both inside and outside consumption of textiles and clothing have declined sharply. On the one hand, the domestic and global economic situation is not good and demand is sluggish, but also because of fierce competition in textile and clothing exports from India and Vietnam.

For example, from 1 to November this year, Vietnam's textile and clothing exports to the United States increased by 11.7% over the same period last year, and the two countries signed the TPP agreement. In the future, Vietnam's export tax rate to the United States will drop to zero. The government of India reformulated the commodity tax rebate rate standard in November to stimulate exports, and did not exclude future free trade agreements.

The situation of domestic textile enterprises can be described as "housing leakage is subject to continuous rain."

In short, the cotton demand side problem is serious, and it may continue to deteriorate in the later stage; and the "Big Mac" of the supply side, the digestion of state cotton and cotton, in the final analysis, will depend on the improvement of downstream demand.

Before the economy gets out of the bottom, the textile industry will probably only be able to preserve its strength through industrial upgrading and structural adjustment.