Business Confidence Is Gradually Resuming, Resuming Production And Resuming Production.

First, domestic cotton yarn spot prices steady, futures prices continue to rise.

Domestic yarn spot prices remained stable this week. The national cotton market monitoring system yarn index CNCotton C32S average price of 20465 yuan / ton, unchanged from last week, yarn cotton price difference of 7030 yuan / ton, compared with last week reduced by 57 yuan / ton; cotton yarn futures average settlement price 21338 yuan / ton, compared with last week rose 264 yuan / ton, higher than spot 873 yuan / ton, the price difference expanded last week 264 yuan / ton.

At present, most of the resumed businesses are mainly ordered before the production of the Spring Festival, the quotation is relatively stable, the support of the national policy, plus the resumption of the Keqiao and the Eastern Silk Market (Keqiao China light textile market town resumed fully in February 18th, the Chinese Eastern Silk Market resumed its turnover on the first day of February 21st, exceeding 80%), as well as the resumption of the shipping companies and port yards, and the confidence of enterprises gradually increased. Recovery, the entire industrial chain is running.

Two, international cotton yarn price stability

(1) 32 cotton yarn

This week, the average delivery price of India port was 20680 yuan / ton. The price difference between China and India [1] [1] was -215 yuan / ton, both were flat with last week; the average price of Vietnam port delivery was 20260 yuan / ton, and the price difference between China and Vietnam was 205 yuan / ton, all of which were unchanged from last week.

(two) 21 cotton yarn

This week, the average delivery price of India port was 19760 yuan / ton, unchanged from last week. The price difference between China and India increased by 20 yuan / ton to 290 yuan / ton last week. The average delivery price of Pakistan port was 19350 yuan / ton, unchanged from last week, and the price difference between China and Pakistan increased by 20 yuan / ton to 700 yuan / ton last week.

(three) 10 rotor spinning

This week, the average delivery price of India port was 13380 yuan / ton, and the price difference between China and India was -145 yuan / ton, all of which were unchanged from last week.

Affected by the sudden outbreak of the new crown disease, the extension of the Spring Festival holiday, the delay in the resumption of the downstream work, and the push up of the procurement, from mid January to late February, although the Chinese main port's foreign yarn arrived in Hong Kong, there was little change in the number of bonded warehouses, but customs clearance and shipments were not ideal, and some traders had not yet opened. According to Ningbo, Guangzhou, Qingdao and other port traders feedback, with the coastal area weaving enterprises, garment factories and intermediate commercial land resumed work, imported cotton yarn inquiry was active than in early February, importers and traders worried about the spread of the epidemic and the deterioration of the external market environment.

Three, polyester staple continued downward trend

This week, the national cotton market monitoring system chemical fiber index, CNCotton PS (1.4D direct spinning polyester short) average price of 6548 yuan / ton, compared with last week fell 146 yuan / ton, cotton polyester price difference increased 203 yuan / ton to 6887 yuan / ton last week; CNCotton VS (mainstream viscose staple fiber) average price 9618 yuan / ton, compared with last week rose 18 yuan / ton, cotton sticky price difference increased last week 39 yuan / ton to 3817 yuan / ton.

Four, outlook for the future

(1) favorable factors in the later stage

1. China has promulgated relevant policies and stable economy successively. In February 18th, the Ministry of Commerce issued the notice on "stabilizing foreign trade and promoting foreign capital promotion fees" to deal with the new crown pneumonia epidemic. The circular pointed out that we should support the development of the new mode of foreign trade and actively deal with the restrictions on foreign trade. We should do a good job in stabilizing foreign trade and promoting foreign investment, and minimize the impact of the epidemic on business development. On the same day, the Executive Council of the State Council stressed that the current coordination of epidemic prevention and control and economic and social development is a pressing task of steady employment and steady employment. The phased reduction of enterprises' pension, unemployment, industrial and commercial insurance units payment, support enterprises resume work and resume production, so that enterprises have a buffer period after resumption of production.

2. the United States ruled out tariffs on Chinese textiles and clothing for 8 Tax numbers. In February 19, 2020, the United States Trade Representative Office (USTR) announced the ninth batch of 200 billion dollar products under the list of tariff products. This excludes a total of 47 products, including 8 textile and garment products, which is relatively good for the cotton textile industry.

3. in the latter stage or consumption climax. The impact of the epidemic on the economy is phased. The consumption of many commodities is not disappearing but postponed. Later consumption may be concentrated at a certain stage to form a consumption climax. In addition, the epidemic will affect people's consumption view to a certain extent, stimulate consumers' pursuit of health and quality life, and thus make structural changes in clothing consumption.

4. the increase of coal consumption in the six major power plants on the coast indicates that the resumption of work is speeding up. Wind data show that in February 21, 2020, the coal consumption of the six largest power plants in the coastal area was 421 thousand and 300 tons, about 62% of the same period last year, rising by 14% compared with the first day (February 10th). The coal consumption of Zhejiang electric and Guangdong electric power company increased steadily, and the trend of returning to work in East China and Southern China was obvious. The increase of coal consumption in power plants can explain to some extent that the progress of enterprise resumption is accelerating.

(two) late negative factors

1. internal and external demand is not optimistic, alert orders transfer. In terms of domestic demand, the impact of the epidemic is much greater than that of 2003, which directly led to a setback in spring clothing consumption. The global supply chain ruptured for nearly a month during the Spring Festival, and some multinationals have begun to look for new suppliers, and overseas orders may be transferred and postponed.

2., the polarization of enterprises is obvious, and the pace of industrial reshuffle is accelerating. At present, many small and medium-sized enterprises have not yet resumed their work and resumed production. In the face of tight cash flow, shortage of epidemic protection supplies and huge employment pressure, the risk of operation has been very large. At the same time, strong enterprises have invested heavily in the resumption of production, some have attracted customers through innovation, and some have actively switched to medical protection products. The polarization of textile enterprises is obvious, the speed of industrial reshuffle will be accelerated, and its negative impact on cotton consumption deserves attention.

[1] the difference is the difference between the yarn price and the yarn price.

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