The Textile Industry Is More Pessimistic.

This issue is:

1) global supply is expected to be ample in 2019/20, and international cotton prices will continue to be under pressure.

ICAC6 month supply and demand report said that the Sino US trade dispute has affected cotton demand and supply chain in the past year.

At the same time, cotton growing areas in main producing countries such as China, India, the United States, Pakistan and Brazil are expected to stabilize or increase. Under normal weather conditions, global production in 2019/20 is expected to increase significantly.

ICAC said that the Sino US trade dispute continued, the global economic forecast slowed down and the growth of cotton consumption slowed down, which will bring downward pressure on cotton prices.

2) the pessimistic atmosphere of the textile industry is strong, and terminal consumption continues to weaken.

The 5-7 month is the traditional off-season of the textile industry. Under the dim prospect of Sino US trade, overseas orders have been running out. Some export oriented enterprises have indicated that the orders in August and later have obviously shrunk, and the signs of pferring to Southeast Asia are very prominent, which directly affect the consumption of cotton and cotton yarn.

At the same time, domestic textile and garment market consumption continued to be weak.

In addition, due to slow demand, passive storage of finished products is serious.

In the industry response, most textile enterprises inventory increased by more than 50% compared with the same period last year, individual enterprises inventories increased 10-15 days over the same period last year, some even more than 40 days.

The increase in cotton yarn inventory has made it difficult for some textile factories to cash in cash and even find it difficult to make money to buy lint. A small number of small factories have been shut down, and many workers have been adjusted to reduce production time.

Most enterprises collectively see the decline in textile market in the second half of the year.

3) domestic cotton sales continue to slow down, and commercial inventories are still at historically high levels.

Downstream purchasing demand has been weakening, and domestic cotton sales have not been smooth since April.

As of June 6th, the national lint sales rate was 70.3%, down 7.9 percentage points from the same period last year, representing a 18.1 percentage point decrease over the past four years.

At the same time, with the coming out of the reserve cotton, the import quota is expected to be released in the middle and late 6 months. There are more channels for sourcing cotton sourcing, larger space for selection, significant extrusion effect on Xinjiang cotton, domestic commercial inventories are still at a historical high level, and late sales pressure is still large.

At the end of May, the total inventory of cotton business in China was about 3 million 528 thousand and 100 tons, an increase of 974 thousand and 600 tons compared with the same period last year, an increase of 38.17%.

4) short-term trend Outlook: the external market, the impact of the escalation of Sino US trade war is gradually released, Zhou Mei cotton export sales data is poor, the main rainfall in the United States is conducive to cotton planting, under the negative factors gathered, ICE cotton short or weak shocks.

On the inside side, the prospects for Sino US trade negotiations are dim, terminal demand continues to be weak, the overall shrinking trend of the textile industry chain is increasingly prominent, the industry is pessimistic, the cotton and chemical fiber procurement market is depressed, and short-term Zheng cotton is still weak.

Important data:

1) the June global demand and demand forecast released by the International Cotton Advisory Committee (ICAC) said that the global cotton consumption in June will still increase to 26 million 900 thousand tons, up 1% from the same period last year, but the output is expected to grow by 7% to 27 million 600 thousand tons. The final inventory is expected to increase to 18 million 600 thousand tons, and the inventory consumption ratio is 69%.

2) customs general data: in May 2019, China's textile and clothing exports amounted to US $23 billion 831 million, an increase of 22.46%, an increase of 1.65% over the same period last year.

In 1-5 months, the total export volume of China's textile and clothing was 99 billion 589 million US dollars, which was down 2.88% from the same period.

3) according to the survey data from the China Cotton Association, the total inventory of cotton business in the whole country was about 3 million 528 thousand and 100 tons at the end of May, a decrease of 266 thousand and 800 tons compared with April, a decrease of 7.56%, an increase of 974 thousand and 600 tons, an increase of 38.17% over the same period last year.

Trading strategy:

It is estimated that the short term trend of Zheng cotton is still weak, with the main fluctuation interval of 12500-13300 yuan / ton.

On the operation, the empty list will continue to hold.

The fluctuation of the disk is large, so it is prudent to operate.

Concern: (1) in June 17th, the office of the United States Trade Representative (USTR) will hold a hearing on the Levy of tariffs on the remaining 300 billion US dollars.

(2) at the end of June, the summit meeting between China and the United States was held at the G20 summit.