Cotton New And Old Annual Conversion Cotton Prices Can Get Out Of The Haze?

In August, when the old and new year of cotton was transformed, it was regrettable that market sentiment was pessimistic, cotton prices were low and new, and the current price system was reshaped. Throughout the first half of the year, the main reason for the fall in cotton prices was that the trade war between China and the United States led to a reduction in consumption. After all, the United States, as the largest market in China's textile and clothing exports, can not be underestimated. At this stage, textile enterprises are going through a difficult time, and when they will be able to cross the ridge smoothly, it is very important for the cotton price trend. Just as the Tao Te Ching said, "mysterious and mysterious, the door of many wonderful things". At that time, the mysterious door of cotton price is more demand side.

In order to find out the actual production situation of downstream textile enterprises, China cotton net reporter visited various cotton textile monitoring stations in Jiangsu province. Jiangsu province has strong representativeness in the cotton spinning industry in China. Textile and clothing has always been one of the important pillar industries in Jiangsu province.

At present, Jiangsu has formed more than 30 textile and clothing clusters with obvious professional characteristics, which shows that the industrial chain system is complete, specialized features are obvious, and small and medium-sized enterprises are the main ones. According to the National Bureau of statistics, Jiangsu's yarn production in 2018 was 3 million 32 thousand tons, second only to Fujian, Shandong and Henan.

The production and operation of the enterprises are basically normal, and not as pessimistic as expected by the outside world. Most of the start-up rates are beyond the expectations of the journalists. They are subject to a sharp drop in cotton prices, and profits have shrunk considerably.

In this survey, the reporter visited Xuzhou, Yancheng, Wuxi, Taizhou, Jingjiang and other cities and counties, and realized that most of the enterprises started up at 100%. In addition to the normal holidays, there was no rest throughout the year, and a few enterprises started at 70-80%. Local textile enterprises told reporters that the production of enterprises remained normal, compared with other provinces and cities, less production and limited production. If we purchase cotton spinning according to the current market situation, enterprises will be able to earn a certain profit, leading to the current situation of capital loss or even loss, mainly due to the stock of raw materials at a high price in the early stage.

It is understood that the current inventory of enterprises basically maintained in 1 months or so, as the purchase of cotton indicators, storage scale is different, resulting in a great difference in the average price of raw materials for enterprises, some enterprises average price of about 14100 yuan / ton, some enterprises in 15000 yuan / ton, for the use of long staple cotton production of high-end yarn enterprises, raw material average price as high as 25500 yuan / ton, compared to the current market 12000 yuan / ton price, enterprises bear the cost burden is not small.

This also explains why cotton reserves keep a high turnover rate. As long as there is no big fluctuation in market cotton prices, enterprises will make their own or entrust the traders to take photos, so that the average stock price of raw materials can be continuously reduced. If there is a big fluctuation in the market or the expected cotton price will continue to fall in the future, the business will stop watching.

Most enterprises say that in order to reduce risks, they are cutting down the scale of raw materials inventory, and some enterprises have reduced their inventory to 20 days, which is close to maintaining the minimum inventory limit, and such enterprises occupy the overwhelming majority.

The stock of spinning and weaving cotton yarn has increased, which has been maintained for 20 days, and the export orders in the US market have decreased, and the markets in Europe, Japan and Korea and the Middle East have been performing normally.

According to the reporter's investigation, Jiangsu's yarn is mainly made of combed, combed compact spinning and other high-end products, and its product sales are relatively stable. Local enterprises began to decline in order since May, and the products were gradually in the storehouse stage. This situation is almost a problem for all enterprises, and the export orders in the US are even more serious.

A 30 thousand scale enterprise in Xuzhou told reporters that before the end of April, trade friction between China and the United States eased, and the supply of products was in short supply. In May, Sino US economic and trade relations were again strained, and orders fell significantly. Among them, the US orders were greatly affected. The old customers purchased 30-40 tons of yarn per month, and now one ton has not been purchased.

Another local company with 20 thousand spindles mainly produces velvet yarns, which occupy a certain proportion of the US market. Enterprises reflect that sales problems began in May, and the speed of freight transportation gradually slowed down. In order to reduce losses, it was forced to maintain its operating rate at 70%.

Mao Zedong said in the strategic question of China's revolutionary war, "China is a great power -" the East is not bright, the west is bright, the south is black, and the north is not. "

This famous remark was once again fulfilled. According to the statistics of the General Administration of customs, the growth rate of imports and exports in China's main markets such as the European Union, ASEAN and Japan in 1-7 months is higher than that of the whole country. In the first 7 months, the EU is China's largest trading partner, ASEAN is the second largest trading partner of China, and the United States has dropped to the third largest trading partner of China. The total trade volume between China and the United States is 2 trillion and 100 billion yuan, down 8.1%, accounting for 12% of our total foreign trade value.

Data also showed that in the first 7 months, China's clothing exports were 561 billion 260 million yuan, an increase of 2%, and textiles 472 billion 70 million yuan, an increase of 7.7%. Although the growth rate has dropped slightly, it remains basically stable in general.

In this regard, Yancheng City textile enterprises said that the export orders for exports to the EU, Japan, Korea and the Middle East were not affected. Although the US market orders declined significantly, other markets made up for this part of the losses to some extent.

Comparison of export data of textiles and garments in China in the past 2008-2018 years

Sino US trade friction is the main reason for the reduction of downstream consumption. However, many enterprises reflect that excessive production capacity and high output are also one of the reasons for the domestic cotton spinning industry to get into trouble.

The respondents told reporters that the domestic cotton spinning capacity was too large, and the yarn price fell sharply, as expected. From the beginning of the year, it will be vaguely felt that the winter market is coming. After the rapid development of textile industry from 2016 to 2018, the domestic cotton textile industry seems to be prosperous and thriving, but the crisis is gradually approaching.

The above is only one side of the company's speech. The Chinese cotton textile industry association has different opinions: "there are many claims about excess capacity in the industry. I think we should dialectically see that as long as there is a market, we can not say anything left." At present, there are still some low-end and backward equipment running in China. To say excess, it should refer to this part. The industrial structure is unreasonable and needs upgrading and upgrading. "

This person pointed out that at present, the proportion of low-end production enterprises is relatively large. About 80% of the enterprises produce low-grade products, 6% of them produce medium and high grade products, 4% of them produce low quality and low price products, and only 10% of them produce high quality products. In the current stage of consumption upgrading, the demand for low-end products is decreasing, so this part needs upgrading. The new capacity of Xinjiang is so large that the mainland enterprises have not seen a large number of failures.

It is reported that a few years ago, the cotton textile industry spread a saying that if the new cotton spinning capacity in Xinjiang reached 20 million ingots, the mainland could close at least 40 million spindles. The reason was that Xinjiang cotton spinning enterprises benefited from various subsidies and preferential policies under the condition of limited market capacity, and the mainland enterprises could not compete with them at all.

According to the relevant data, in 2018, Xinjiang's cotton spinning capacity reached 18 million spindles, and its cotton output reached 1 million 500 thousand tons. So important cotton textile base was built up. At least, so far, no large number of enterprises in the mainland have fallen down.

Reporters in the process of investigation, deeply feel that enterprises are very concerned about the trend of Sino US trade negotiations, because this is directly related to the healthy and sustainable operation of the industry. However, after two years of economic and trade negotiations between the two countries, you came to me and the Taijiquan hand crossed each other. Instead, it is mixed up with a lot of things that have nothing to do with trade.

Some professionals believe that the trend of the cotton textile industry will still have a huge relationship with Sino US economic and trade negotiations, but cotton prices will return to the fundamentals of supply and demand after a long period of fatigue and market digestion. At the moment, downstream consumption dominates, but from the perspective of the characteristics of agricultural products, the key factors for future cotton price rise will eventually return to the supply side.

Indeed, looking at the cotton supply and demand balance released recently by USDA, we can see that in the new year, besides the shortage of cotton supply in China, the world's cotton production exceeds demand and the supply is still adequate.

With the advent of typhoon Li Ma Ma, Jiangsu's research is also completed as planned. Where is the spring of cotton spinning industry? It is not easy to draw a conclusion now. For the time being, we can not see the enterprises in the industrial chain. But one thing is for sure. In order to replace the cotton in the new and old year, the market has changed and improved. There are some changes in the fundamentals of supply and demand, whether spontaneous or forced.