Sino US Trade Friction Has Repeatedly Led To The Downstream Status Quo Does Not Support The Rise In Cotton Prices.

Although cotton market has been under the pressure of sufficient supply since 2019, many investors are still optimistic about the future market.

In recent years, cotton prices have fallen as the dumping and storage continues and trade frictions between China and the United States have been repeated.

However, the enthusiasm of the Bulls remained unchanged, and the 1909 position remained at a relatively high level for the same period.

In the current situation, the downstream consumption situation has a very important impact on the market.

Based on this, in the end of March and the end of April, the textile industry research in Jiangsu and Shandong was carried out in order to solve these problems.

First, let's talk about cloth mill.

On the home textile fabric market, some factories reflected that the 30-50% orders were reduced year by year, and even big factories were shut down and had a holiday.

Factories believe that the bad market environment is the biggest reason.

In the market of garment fabrics, different factories are different. Some factories pay a little profit due to technological innovation and cost control, but some factories are having difficulties.

In addition, when the market is good, the Loom factory produces more orders, and when the market is not good, the Loom factory will reduce the order and strengthen the routine cloth production.

At present, the order reduction and routine cloth production increase.

In the short term, even if the factories are able to afford more conventional cloth production, the factories with more capital pressure will increase their routine cloth production, which will probably lead to business difficulties due to the increase in inventory, and then they will fall into a downtime or close down.

The reasons for the poor overall performance of the fabric market are as follows: the global economic downturn has led to shrinking demand; Sino US trade friction has affected us orders. The United States is worried about the risk of raising taxes after placing the order. The order should be as short as possible or pferred to the Southeast Asian market. The competitive power of the periphery will increase and the chain of the industrial chain will be pferred to Southeast Asia, India and even Africa.

Next, I talk about dyeing factories.

The Xiangshui explosion has affected the whole dye raw material market. At present, the price of dyestuffs has risen sharply, and the price of dyed cloth has been raised, and the downstream production cost has increased.

In addition, after more than 2 years of pollution control, the number of dyeing plants has decreased significantly, mainly due to high input costs and strict production requirements.

Theoretically, dyeing factories are the bottleneck of the entire textile industry, and there should be more sufficient orders.

But at present, enterprises reflect that dyeing factory orders are not very satisfactory.

Finally, I would like to talk about the situation of the cotton mill.

The profits of the mills are constantly shrinking, and they are now making a profit.

Judging from the visit to Shandong, the price of yarn is relatively strong.

In addition, most of the raw materials and finished products inventory of Shandong's cotton mill are low, and the finished product inventory is less than 20 days.

There is a doubt that the day of the cloth mill is very sad with the garments and home textile factories. Why are the days of the cotton mill much better?

A simple summary is that the regular stocking and order production adjustment of the cloth mill makes its demand for yarn less than that of the cloth.

However, in May, cotton mills gradually became worse, and yarn prices dropped and inventories of finished goods increased.

To sum up, at present, the overall environment of downstream industries is not good, and in the next 3 months, it is difficult to get better in the short term.

In the long run, the pfer of textile and garment industry to Southeast Asia is a trend, and domestic cotton consumption may continue to decline.

It can be said that the downstream status does not support the rise in cotton prices.