All Threats Are Futile. Exports Of Domestic Textile Giants Increased Sharply In The First Half Of The Year.

It is undeniable that China has occupied an absolute leading position in the world textile supply chain. Chemical fiber production accounts for 70-80% of global output, and chemical fiber is the main textile raw material of the people all over the world. As mentioned earlier, textiles, as a basic commodity for people's livelihood, have been proved by history to be stable and will continue to grow in the extreme circumstances of 2008 and 2015.

But now things are changing. The United States will raise taxes on Chinese exports. The first batch of tax increases will be implemented in September 1st. Textiles are also among them. China's position in the textile supply chain will not be changed in the short term. Who will bear the cost after the implementation of the tax increase? Is it a Chinese manufacturer or an American consumer?

The first half of the foreign trade report card came out! The west is bright and the East is bright.

According to the foreign trade data released by the General Administration of Customs in the first half of this year, China exported 7 trillion and 950 billion yuan, an increase of 6.1% in 1-6 months.

　　 The west is bright and the East is bright. In the first half of this year, China's total value of imports and exports to the EU was 2 trillion and 300 billion yuan, an increase of 11.2%, accounting for 15.7% of China's total import and export value; China's total import and export value to ASEAN was 1 trillion and 980 billion yuan, an increase of 10.5%, accounting for 13.5% of China's total import and export value. Over the same period, China's total value of imports and exports to the United States decreased by 9%, accounting for 12% of China's total import and export value of 1 trillion and 750 billion yuan.

It is worth noting that China's exports to the US fell by 8.1% in the first half of 2019, while exports to the EU increased by 6%, and exports to ASEAN increased by 8%, of which Vietnam's exports increased by 14%.

　　 China's heavyweight textile giant Su Mei Da, Jiangsu Guotai and Shenzhou International hand over their foreign trade bright transcripts.

Su Meida (600710.SH) first published the interim report in 2019 in foreign trade enterprises. Usually, only the bull companies will be the first to publish performance reports, on the one hand, because the good companies themselves are highly efficient; on the other hand, if they perform well and do not make false accounts, they will not have to drag their feet away.

In the middle of 2019, the sum of textile exports increased by 12.95% over the same period last year, compared with 2.16% year-on-year, 30.82% year-on-year in 2017, and 7.59% year-on-year in 2016.

　　 Jiangsu 002091.SZ is also the leading exporter of textiles in China. The export of textiles increased by 3.70% year-on-year in 2018.

As one of the most important and competitive textile exporters in China, Shenzhou International (2313.HK) exports increased by 15.84% year-on-year in 2018, and exports to the US increased by 39.14%. 　　

　　      After reporting the data of textile exporters such as Shenzhou International, Jiangsu Guotai and 600981.SH, we should be able to see the actual situation of textile exports more accurately.

Facts have proved that all intimidation is futile. Polyester raw materials: look forward to making the best of the profits and suffering!

Looking back at the current fundamentals of polyester raw materials market, the supply of ethylene glycol is slightly surplus, PTA is basically balanced in the short term, and there is a structural mismatch in the medium term. It mainly depends on the speed of putting the new capacity of polyester into production and the speed of production of new PTA, who is faster and who is slower. Worries about future supply will continue to weigh down the price of ethylene glycol. The basic supply and demand of PTA is basically neutral, and the fluctuation of actual demand mainly depends on the actual export data of the United States after exporting taxes to China's textile exports.

Ethylene glycol has reached the lowest level at the end of 2015 in theory, and the lowest price in July 10, 2019 was 4150 yuan / ton. PTA has just returned to its mid 2017 prices, and it has nearly 1000 yuan / ton space from the low 4200 in late 2015.

If the trade war has a substantial impact on the export demand of textiles, the low price of PTA and ethylene glycol breaking the end of 2015 is a big probability event. In particular, ethylene glycol superimposed an unprecedented fear of supply, which broke the 2008 low and the probability was higher than 50%.

Judging from the current export data of Su Mei Da, at least in the first half of 2019, it has not yet made any substantial impact. One possible reason is that both the exporter and the importer advance to the first half of the year in advance in order to seize the time. This can explain that the figures for the first half of this year are better than that of last year. Under such circumstances, the price of PTA and glycol still made such a sharp response. It should be said that the force of supply is mainly caused by emotional force and supply side factors, and the strength of demand has not yet materiality.

If the negative estimates of demand side will not be met, that is, this year's data, textile exports can still maintain a balance or even maintain a basic growth in the case of tax increases, which will break the market's fear of trade war and return to the original price analysis frame. The macro side will be pessimistic, but at least not as pessimistic as 2008. The structural contradiction of the fundamentals is still there, but it is not as bad as 2012-2015. At that time, there may be a lot of bad luck.

If this happens, it is also the time for China to win the trade war comprehensively or even win. Similar to textiles, after 40 years of reform and opening up, China's position in the supply chain of most global basic commodities has been hard to replace. At that time, trump will understand that all his threats are futile.