Cotton Yarn Market Continues To Fade, Imported Yarn Is Subject To Double Cost Of Material Cost And Exchange Rate.

"Levy tariffs, as a manipulator of currency manipulation", Trump's wave of Sao business led to the decline of Zheng cotton and cotton yarn futures, and the depreciation of the renminbi. As of August 1st, the domestic C32S average price was 20952 yuan / ton, down 170 yuan / ton again compared with last week. But for this storm, the cotton yarn exchange is weakening again, but the market is relatively calm.

Unlike previous times, the sharp fall in cotton did not lead to a rapid decline in pure cotton yarn. From profit and loss chart, we can see that the immediate profit has already turned to profitability. But in fact, before the spinning enterprises use more expensive cotton, the actual production is still losing money. As the market continues to weaken and textile enterprises continue to lose money, many textile enterprises recently took advantage of the high temperature holiday or limited production phenomenon has increased. Judging from the stock and starting of yarn, the overall starting rate of yarn has been lowered to nearly three years, and the stock has rebounded to about 28 in mid June. Part of the textile industry said that under high cost, instead of continuing to reduce prices to enlarge losses, it would be better to choose production cuts and stop production.

From the perspective of raw material cotton, the price of CC3128 has dropped to 13591 yuan / ton as of today, and since the beginning of this Monday, Zheng cotton has again been down to 12200 yuan / ton. Many industries say that they will stay away from futures and watch carefully. In the same period, the turnover rate of cotton reserves also dropped to a low level. The turnover rates were 30.58%, 27.85% and 21.44% on August 6th, 7 and 8, respectively. The lack of downstream driving force further weakened the cotton consumption momentum.

For cloth boss, this year's off-season is a bit unbelievable. From mid May to now, August seems to have seen no strong trend. The price of cotton cloth has been reduced by 0.6 yuan / meter in the past three months. Grey cloth industry itself has a very limited profit level, and the collapse of prices overlay the depression of the order environment, resulting in a serious backlog of grey fabric inventory. More weaving manufacturers said: we burst the warehouse! Nearly ten million meters have no place to store. And with the approaching of high temperature, most of the weaving mills have a miserable and miserable situation to avoid serious losses in the off-season, holidays and reduction in production. From the perspective of terminal clothing, the situation is not optimistic. Many clothes even have no brand orders. It is understood that some clothing brands, such as Hai Lan's home, HM, etc., have accumulated a lot of inventory.

For imported yarn, it has suffered a double blow from the drop in cotton prices both inside and outside and the "7 breaking" of the exchange rate. As of August 8th, the FCY Index C32S index was 21430 yuan / ton, down 151 yuan / ton compared with last week. The drop in domestic and foreign cotton prices has led to a rapid downward trend in the cost of production in the future market, and the US dollar price of port spot has long been fixed. This is just like when the water level drops, the cost of imported cotton yarn is isolated like an isolated island. Since entering August, the exchange rate of RMB against the US dollar has depreciated from 6.88 to 7.05, devaluation has exceeded 1700 basis points, and the depreciation rate has been 2.5%. India cotton yarn has to be mentioned. The cotton yarn industry has always been one of the pillars of India's textile industry, and also a highly modern and technology driven industry. However, in the second quarter of this year, India's cotton yarn exports dropped by 35%. From the monthly point of view, the export volume of cotton yarn in April was 266 million US dollars, a decrease of 21%. In May, the export volume of cotton yarn was 241 million US dollars, a decrease of 31%. The export volume of cotton yarn in June was only 188 million US dollars, a drop of 50%. There are 2 main reasons for this result. First, the India government has abolished the incentive measures for the export of cotton yarn. For export to China, Vietnamese yarn and Pakistan yarn can be imported into China tax-free, while the printed yarns need to pay 3.5% customs duties. Another factor, and the worst reason, is that although India is the largest cotton producer in the world, its raw cotton price is the highest in the world. From this point of view, the recent bankruptcy of India's largest textile mill, the arrow industry, is also reasonable. With regard to the three major textile technology chains of spinning, branch and garment making, such a large scale enterprise has collapsed so much that if India waits for its sighs, should the textile industry of China ring the alarm bell?

According to industry analysis, in the next twenty years, China will face the suppression of the whole western world alliance. The United States will be stronger, and Europe and Japan will ease some, but suppression will be the main theme. China and the United States have a lot of structural problems. Ultimately, the victory or defeat of the two countries is within themselves, and whoever can reform and solve their own problems is the winner. Take the textile and garment industry as an example, according to statistics, in the past two years, China's textile and clothing exports accounted for about 16% of the total exports to the United States, while the proportion of textiles and clothing imported from the United States accounted for about 36%. It can be seen that in textile and clothing products, the dependence of US imports on China is significantly higher than that of China's exports to the United States. If we do not consider some high-end brand clothing, the United States will rely more on China's imports in the textile and clothing demand of ordinary people. As a result, tariffs on textile and apparel products will fall on the average consumers in the United States, and will have a certain impact on Chinese manufacturers, but it will not bring any fatal impact.