Changes In The Textile Market And Cotton Price Trend At The End Of The Year 2019

The result of Sino US peace talks is directly related to the development of the textile industry.

The change of textile consumption determines the trend of cotton prices.

Textile enterprises are hard to survive, and cotton processing enterprises and traders in the upstream are more uncomfortable, especially cotton prices bear the brunt.

The difference between inside and outside cotton prices is also a black swan in the market. The price difference directly affects the sales of cotton yarn products, and it will also affect cotton prices.

The total volume of textiles and clothing exported to the US market continued to increase in 2018, and the trade between the two countries has not been greatly affected for the time being.

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The so-called new year's coming is like crossing the border; new year's Eve, the road is difficult. This year, the domestic cotton spinning industry has experienced many twists and turns, and also welcomed the new year. How did this year's textile industry go? From the data we know now, it is more difficult than before, but basically it has maintained steady development. At the end of January, the two countries will continue to negotiate, and the situation may be slightly clearer. At present, the views of the industry are basically the same. As long as Sino US trade friction is settled and the textiles are abolished, the domestic cotton textile industry will continue to develop healthfully. Otherwise, there will be some challenges.

The result of Sino US peace talks is directly related to the development of the textile industry.

Any news about the Sino US peace talks will cause a sharp fluctuation in the stock market and commodities. This is a deep feeling. According to the China Cotton Textile Industry Association survey: "in the first half of 2018, the operation of the whole enterprise was good. In the second half of the year, especially after 9-10 months, the golden nine silver ten" peak season did not appear, the product sales sluggish and the profits declined ", which was affected by the Sino US trade friction.

In addition, in the first half of 2018, "the off-season is not bad" is also very obvious, through the inquiry to the enterprise that, in the first half of the year, when Sino US trade wavered, many enterprises were rushing ahead of time to produce the order, hoping to avoid the added tariff effect, and of course overdraft the subsequent orders. At the end of November, in the process of textile enterprise research, reporters could feel deeply that it was not easy. The increase in product inventories was already an indisputable fact. Even individual enterprises had delayed wages. In order to reduce costs and avoid risks, many enterprises have reduced the scale of raw materials inventory. A textile business person said: "China's exports to the United States textile tariffs increased by 10%, can be digested through related initiatives, but if we increase to 25%, our product advantage will be lost."

Textile enterprises are hard to survive, and cotton processing enterprises and traders in the upstream are more uncomfortable, especially cotton prices bear the brunt.

From the survey visits, the vast majority of downstream enterprises basically finished stocking at the close of the year, and production gradually entered the holiday mode. According to statistics from Huarui information, many factories have been closed now, and many factories are preparing for early holidays. When the new year is approaching, the pressure of enterprises is self-evident. Of the 9 textile factories surveyed in Shandong, 6 were on vacation earlier than last year. Two are not sure, one is flat in previous years, and 66.7% ahead of schedule. In addition, in Zhejiang, Jiangsu, Hebei, Shaanxi and other enterprises visited, the holiday time is also ahead of schedule. But just from Anhui and Henan, the textile factory's holiday time is the same as in previous years.

It is understood that textile enterprises in order to withdraw funds to clean up some inventory as early as a few years ago, but with the downstream factories have stopped purchasing cotton yarn, spinning enterprises have entered a storehouse stage, which has a great impact on cotton sales and cotton prices trend. Cotton spot traders said that now that the procurement of enterprises is basically completed, the sale of lint cotton has been in the off-season. In the process of abundant market resources, large selectivity and low price, the textile enterprises are cautious in making a small stock. Because of the high cost and low price of lint processing this year, some ginning mills and traders are reluctant to sell, waiting for the market to reverse.

The change of textile consumption determines the trend of cotton prices.

The above picture shows that China's cotton production is insufficient, and we need to use external cotton and cotton reserves to meet consumption. This is why we pay much attention to output in the early days. However, with the Sino US trade issue highlighted and the impact increasing, cotton price speculation has shifted from reduced production to consumption.

With the ferment of Sino US negotiations, the impact on cotton consumption is also getting more and more attention. Finally, whether the two countries can impose tariffs on each other will directly affect more and less consumption. Cotton professional told reporters that if there is no Sino US trade tariff plus this gray rhino, cotton price trend is definitely another situation. At present, based on the swing of Sino US negotiations, the US USDA data and domestic data do not make a big adjustment to cotton consumption. If the situation exceeds expectations, cotton is likely to shift from supply shortage to supply and demand balance or oversupply, and cotton price is expected to further open up downward space.

The difference between inside and outside cotton prices is also a black swan in the market. The price difference directly affects the sales of cotton yarn products, and it will also affect cotton prices.

It is understood that in 2014 -2015, domestic cotton prices remained at a high position, the difference between domestic and foreign cotton prices was large, and the imports of cotton yarn in China increased significantly. In 2016 -2017, the cotton prices decreased and domestic cotton prices narrowed, and China's cotton yarn imports were relatively small. Cotton spinning professionals believe that if the price difference between inside and outside cotton is more than 1500 yuan / ton, the advantages of the yarn will become apparent. The increase of imported yarn will inevitably result in the decline of domestic yarn consumption. On the contrary, there is a consumption of yarn.

After two years of price divergence, domestic and foreign cotton prices began to converge in 2018.

The total volume of textiles and clothing exported to the US market continued to increase in 2018, and the trade between the two countries has not been greatly affected for the time being.

Trade friction between China and the United States really has a certain impact on China's textile and clothing exports. It is reported that the monthly export growth of China's textile and clothing has decreased significantly since October 2018. Taking December as an example, China's textile and garment exports amounted to 23 billion 117 million US dollars, down 3.65% from the same period last year. Among them, exports of textiles (including textile yarns, fabrics and articles) amounted to 9 billion 882 million US dollars, down 2.63% from the same period last year, the first time since April 2018, and the export volume of garments (including clothing and accessories) was 13 billion 235 million US dollars, down 4.39% compared with the same period last year.

However, from the whole year, the total volume of textile and clothing trade between the two countries continued to rise steadily. In 2018, China's textile and clothing exports totaled US $276 billion 730 million, an increase of around 3.5%, of which US $about 40000000000 was exported to us textiles and clothing, a slight increase compared to the same period last year. Although trade between China and the United States fluctuated in 2018, trade between the two countries did not fluctuate sharply in the short term.

In addition, statistics from relevant institutions show that in the past few years, China's textile and apparel market has been declining in the global market. Vietnam and other Southeast Asian countries are rising rapidly with the advantage of production cost, and it is only a matter of time before they take the place of China. In terms of textiles alone, the difficulty is certain, but at the moment, the outside reaction may be a bit too extreme.

As the new year is approaching, the domestic cotton textile industry will continue to suffer. As for the outcome, no one can predict it. After all, black swans are flying everywhere, and rhinoceros are also bumping around everywhere. The long road of negotiation between China and the United States has just begun, and 2019 is also destined to be an extraordinary year.