Looking Back At The Sino US Trade War Which Lasted For 464 Days, After The Armistice, The Textile Market Will Be Boosted.

During the first meeting of the US dollar meeting held in June 29th, the two heads of state agreed that China and the United States should resume economic and trade consultations on the basis of equality and mutual respect. The US side said it would no longer impose new tariffs on Chinese exports. The two countries' economic and trade teams will discuss specific issues.

Stop and stop! Long drawn out Sino US trade war

In March 22, 2018, Trump announced the massive tariffs imposed on US $60 billion of Chinese goods and restricted the merger and acquisition of Chinese enterprises to the US, which opened the curtain on the current Sino US trade war.

In May 19th, China and the United States issued a joint statement on bilateral economic and trade consultations in Washington. Both sides agreed that effective measures would be taken to substantially reduce the trade deficit between the United States and China.

In July 6, 2018, the US Customs and Border Protection Agency announced that the United States would impose 25% import duties on the first batch of Chinese products on the list of 818 categories and 34 billion US dollars on July 6th (Beijing time 6 noon).

On the same day, the Chinese Ministry of Commerce said that China will also impose an import tariff of 25% on the same scale of us products on the same day.

In December 2018, the United States suspended tariffs on the $200 billion list, and China and the United States opened new trade talks. The two sides remained optimistic.

In May 9th, the US government formally announced that since May 10, 2019, tariffs on the $200 billion list of goods imported from China have been added to customs duties, raising the tax rate from 10% to 25%.

In May 13th, the US Trade Representative Office (USTR) announced that it would impose a maximum tariff of 25% on the US $300 billion export to China.

In June 29, 2019, the US side said that it would no longer impose new tariffs on Chinese exports. The two sides would resume economic and trade consultations on the basis of equality and mutual respect.

It can be said that the Sino US trade war has been going on and on for a long time.

What will be the impact on the textile industry?

The meeting between heads of state of China and the United States has achieved a phased achievement. The US side has said that it will no longer impose new tariffs on China's export products, and that the threat of $300 billion will be eliminated. What kind of impact will it have on the textile industry?

There is room for price increases! Polyester hot market is just around the corner.

In June 18th, the heads of state of China and the United States exchanged telephone calls to meet at the G20 summit in Osaka, which brought great benefits to the market. With the recent tense situation in Iran, international oil prices began to rise.

In terms of price, the price of polyester raw materials, such as PTA, ethylene glycol, PX or polyester filament, began to rise sharply in recent two weeks.

　　 In terms of inventory, from the statistics point of view, the total stock of the polyester market is now up to 11-20 days. In terms of specific products, POY stocks are concentrated in 4-8 days, and FDY stocks are close to 10-15 days, while DTY stocks are about 18-23 days.

It can be said that the current polyester filament stock is in a very low position, and has ample room for price increase. Under the good news, the price of polyester filament continues to rise, and polyester production and sales are ushering in a new peak.

Favorable news, RMB or further appreciation

After the unilateral declaration of 200 billion tariffs in May 10th, the RMB exchange rate began to depreciate sharply.

　　 In June 18th, after the first exchange call in the US dollar, the yuan began to appreciate significantly. On the night of that day, the intraday rate of RMB rose by 400 basis points.

After the good news came out, the RMB exchange rate is expected to appreciate again.

For textile foreign trade enterprises, the result of RMB appreciation is good or bad. But on the whole, whether exchange rate fluctuations bring more or less profits, but if foreign trade relations are very intense, then it becomes a question of whether orders are or not.

During the visit, some textile foreign trade enterprises also said that the exchange rate was too high or too low, and a stable exchange rate would be most beneficial to them. A stable exchange rate also helps them to calculate costs and avoid unnecessary risks due to exchange rate fluctuations.

US demand is depressed and exports to the US are expected to rebound.

The Sino US trade slowdown and the 300 billion dollar tariff threat temporarily disappears, which is good news for both sides.

In the international market, the cost performance of Chinese textiles has not yet been replaced. Although the textile industry is moving towards Southeast Asian countries from the current general trend, it is only China that can guarantee the quality of textiles and guarantee cost-effective countries because of the workers' quality, supporting industries and technological level.

According to the State Customs statistics, in May this year, China's export volume to the US was decreasing despite the overall growth of China's external exports. However, according to local media reports in the United States, the local enterprises in the United States have not found an alternative textile producing country well enough to say that a large demand for textile products is being suppressed.

The good news is coming, perhaps in the near future, textile exports to the US will have a peak.

Injection into the weaving Market! Falling construction is expected to ease

With the overcapacity of the loom loom and the overall depression of the terminal garment industry, the inventory of conventional products in weaving enterprises has increased substantially compared with previous years.

Recently, because of the rising prices of raw materials and other factors, traders began to get more goods. Although the inventory of textile enterprises has dropped slightly from the previous peak, it is still at a high level. By the late market rebound signs of weaker influence, more traders choose to wait and see.

The first meeting of the US dollar is successful, and the rate of raw materials will continue to push up. It may also bring new demands to the market, and it will give the textile market a strong heart.

On the one hand, in the coming period, traders may take more chances to get goods. On the other hand, the pressure of weaving enterprises' inventory can be alleviated, and the situation that may be able to get better before the start of the boom is likely to improve.

Be vigilant in times of danger, and be cautious and optimistic.

The first successful meeting of the US dollar and the easing of trade frictions between China and the US are a major positive for the market. But for textile enterprises, it should not be blindly optimistic.

First, there is no change in the market environment where the supply of conventional products exceeds demand. The number of looms in the outlying areas will increase at a higher rate before 2020, and the situation of excess capacity will only intensify in the next 1-2 years. Trade relations between China and the United States have eased up, and may bring a certain amount from exports, but the increase in exports of just one country can not offset excess capacity.

Second, the attitude of the United States may be repeated. At the G20 summit in Buenos Aires last year, the first meeting of the US dollar has also met with some consensus, but the tariff of the last 200 billion dollars has come. Therefore, we can not relax our vigilance when we are pleased with the outcome of the meeting.

For textile companies, on the one hand, the successful meeting of the US dollar is a good opportunity to solve the problem of inventory and develop new customers, perhaps to a certain extent, reversing the decline since the first half of this year.

On the other hand, good products are the core competitiveness of enterprises. Textile enterprises should enhance the quality of products and make long-term plans in order to face greater challenges in the future.