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    What Is The Demand For Textile Enterprises After The Resumption Of Sino US Negotiations?

    2019/7/5 16:45:00 4

    Sino US NegotiationsTextile Enterprises

                                                                         

         

    Since mid June, with the meeting between Chinese and US leaders and the resumption of trade negotiations, the price of global agricultural products has rebounded, and the cotton spot market has also started to rise. The CF1909 contract rose from 12720 yuan / ton to 14300 yuan / ton, or 12.42%.

    Some cotton dealers took the "three pronged approach" of spot price, fixed price of warehouse receipt and spot sale quotas. In the 5-6 month, the cold cotton spot market finally came to shine. It is worth noting that in the past half a month, the turnover rate of the reserve cotton liner returned to the high level. Industry analysis, cotton consumption in recent years as the futures rebound began to warm up, cotton futures prices are gradually returning to the right track, the cotton enterprises and investors' panic is weakened by the resumption of Sino US trade negotiations.

    How far is cotton consumption at present? According to the survey of some cotton enterprises in Henan, Shandong, Hubei, Anhui and Jiangsu, cotton consumption is showing signs of "warming up" but not outstanding. Some small and medium-sized mills, weaving factories, and garment factories still reduce risks by reducing production or even shutting down production (three shifts to two shifts, two shifts to one class, and wages to 60-70%). Some foreign trade companies and spinning and weaving enterprises said that the impact of Sino US trade war was mainly on orders in 8-9 months (although the pressure on production and sales in July has appeared, but it can still be digested in a variety of ways). But it is not a cold day. Even if the Sino US trade consultation has made good progress in 8-9 months or even signed an agreement, the return of orders and the improvement of consumption need time to change space.

    First of all, after a month or more of raw materials and products, part of the textile enterprises actually have a small amount of replenishment plan, but mostly to maintain production and buy with their products. From the survey point of view, since the middle of May, many domestic weaving enterprises started the mode of "going to stock, returning funds and ensuring business", and the effect was quite significant. With the passage of time, raw materials such as cotton have dropped to a low level. From the point of view of "no downtime, production protection, cotton reduction and low risk", we should increase the auction reserve cotton and purchase "spot price" resources, but purchase "to the point" and few stockpiling.

    Secondly, the downstream gauze Market is low, and production and marketing are upside down. Cotton yarn has not yet formed an effective support for cotton prices. Judging from the survey, there is a serious loss of cotton yarn in spinning enterprises (most of which exceeds 1000 yuan / ton). Even by the early July, the "double 28" Xinjiang machine picked up cotton warehouse has 14500-14600 yuan / ton (weight) calculation, and the spinning C32S yarn has almost no profit; if the use of the reserve cotton and the Xinjiang cotton spot match, the spinning of C32S and C40S yarn will be profitable, but it is still a problem whether it can be shipped and returned in time.

    In other words, Sino US trade negotiations are still full of variables. Sino US leaders' meeting in Osaka results in a "neutral" preference. Although the United States has suspended tariffs on US $350 billion export commodities to China, the premise is to require China to import large quantities of American food and agricultural products; and all the procedures of the US tax collection have been completed and may fall at any time, and the resumption of trade consultation between China and the United States is just the starting point of the trade war. The differences between the two sides still exist, and the content of the agreement and the attitude of the negotiations have not yet been found to change. Chinese enterprises still have to make preparations for this "protracted war and war of attrition".

         

         

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