Goods Fell Below 20 Thousand Mark Spinning Enterprises Orders Facing "Grain" (16-20 March 2020)

First, the domestic yarn price declines, the most critical price during the year falls below 20 thousand integer pass.

This week, domestic yarn futures and spot prices fell the most in the year. The national cotton market monitoring system yarn index CNCotton C32S average price 20427 yuan / ton, compared with last week fell 244 yuan / ton, yarn cotton price difference of 8212 yuan / ton, compared with last week to expand 166 yuan / ton; cotton yarn futures main clearing average price fell below 20 thousand yuan to 19117 yuan / ton, compared with last week fell 1143 yuan / ton, less than spot 1310 yuan / ton, the difference narrowed 899 yuan / ton last week.

It is understood that after the resumption of production of textile enterprises, the shortage of orders has become the biggest problem restricting the operation of enterprises. Affected by the sharp fall in cotton prices, the textile industry continued to reduce the price of 800-1000 yuan / ton after last week's 500 yuan / ton reduction of cotton yarn last week, but there was no actual transaction after the two price adjustment.

Two, the international cotton yarn prices continue to decline and the decline is expanding.

(1) 32 cotton yarn

This week, the average delivery price of India port was 20554 yuan / ton, down 76 yuan / ton compared with last week. The price difference between China and India was [1] [1], which was reduced by 168 yuan / ton to -127 yuan / ton last week, and the average price of Vietnam port delivery was 20190 yuan / ton, down 56 yuan / ton compared with last week, and the price difference between China and Vietnam narrowed 188 yuan / ton to 237 yuan / ton last week.

(two) 21 cotton yarn

This week, the average delivery price of India port was 19674 yuan / ton, down 52 yuan / ton compared with last week. The difference between China and India was 10 yuan / ton to 420 yuan / ton last week. The average delivery price of Pakistan port was 19264 yuan / ton, down 52 yuan / ton compared with last week, and the price difference between China and Pakistan increased by 10 yuan / ton to 830 yuan / ton last week.

(three) 10 rotor spinning

This week, the average delivery price of India port was 13296 yuan / ton, down 60 yuan / ton compared with last week, and the difference between China and India was 44 yuan / ton to -130 yuan / ton last week.

According to feedback from traders in Guangdong, Jiangsu and Zhejiang, the price of imported yarn inside and outside has been declining for nearly a week. The price of combed yarn and OE yarn in India, Vietnam, Pakistan and other places is slightly larger than that of high combed yarn (FOB, CNF).

1, ICE futures and zhengmian futures prices have dropped considerably. The current cotton yarn quotations of foreign cotton mills are much lower than pre contract prices.

2, the global spread of the epidemic has affected transportation and trade to varying degrees, and the production, shipment and delivery of cotton yarn have been delayed.

3, the resumption of production and reproduction of small and medium-sized weaving and garment enterprises is not as good as expected. Many textile mills have resumed their work but have not resumed production. They are still in a semi shutdown state. With the spread of the epidemic and the slump in crude oil prices, the uncertainty in import yarn demand has increased.

4, the State Administration of foreign exchange data show that on 13-20 March, the central parity of the RMB against the US dollar fell below the 7 yuan integer pass, the expected depreciation of the renminbi increased, and the cost of imported cotton yarn will rise.

Three, polyester, short, sticky short price does not change.

Affected by the collapse of crude oil prices, the shortage of short and short prices will not change. This week, the national cotton market monitoring system chemical fiber index, CNCotton PS (1.4D direct spinning polyester short) average price of 6028 yuan / ton, compared with last week fell 250 yuan / ton, cotton polyester price difference narrowed 160 yuan / ton to 6187 yuan / ton last week; CNCotton VS (mainstream viscose staple fiber) average price 9300 yuan / ton, compared with last week fell 60 yuan / ton, cotton sticky price difference narrowed 350 yuan / ton to 2915 yuan / ton last week.

Four, outlook for the future

(1) the spread of global epidemics has increased.

At present, 43 countries in the world have declared a state of emergency in response to the outbreak of the new crown pneumonia, and the number of foreign confirmed cases has increased to more than 250 thousand. Although the domestic cotton textile and garment enterprises have made rapid progress in the second half of 2, however, due to the outbreak of the epidemic in the Middle East, Europe and the United States, more and more countries began to seal up the country, suspend operations and stop shipping, and the freight transport was greatly affected.

(two) export data in the next few months are hardly optimistic.

China's Spring Festival factors overlay the epidemic situation, resulting in an unsatisfactory export data for the first two months of 2020. According to the General Administration of Customs of China, the export volume of textiles and garments in China was 29 billion 835 million US dollars in 1-2 months in 2020, down 20% from the same period last year. Among them, exports of textiles (including textile yarns, fabrics and articles) amounted to US $13 billion 773 million, down 19.9% compared to the same period last year. Exports of garments (including garments and accessories) were US $16 billion 62 million, down 20% from the same period last year. With the accelerated spread of the overseas epidemic, more and more countries are beginning to close the border to fight the epidemic. It is expected that export figures are still not optimistic in recent months.

(three) economic slowdown is worrying about heating up consumer sentiment or being affected.

More and more countries are shutting down physical stores abroad, such as St Paul, Brazil, closing all retail stores. In April 5th, GAP group closed all stores in North America from March 19th. Messi stores temporarily closed stores until the end of March, Microsoft closed global retail stores, apple closed retail stores in addition to China, and even Chanel, Hermes. Luxury goods giants also announced that they will close their factories in France, Switzerland and Italy in the next two weeks, including high fashion, clothing, high-end jewelry and jewelry.

The impact of the epidemic on manufacturing industry in Europe is gradually emerging. Although many large companies have diversified supply chains, they can still balance production through other countries' factories to meet the demand for orders. However, concerns over the financial and economic slowdown are heating up. Fear of economic slump will affect global consumer sentiment.

(four) yarn and cloth production and sales rate is nearly 3 years, the minimum number of days of inventory is the maximum value in nearly 3 years.

According to the national cotton market monitoring system data, in the beginning of March 2020, the number of yarn and cloth bankbook passages decreased slightly from last month, but it still came to a high level in 2018. Comparing the yarn and cloth production and marketing situation in the past 3 years in 1-3 months, the current yarn and cloth production and sales rate is the lowest in nearly 3 years, and the number of days in inventory is the highest in the past 3 years (see table below).

(five) small and medium-sized enterprises are facing a "big exam" to guard against "collapse tide" and "unemployment tide".

At present, many domestic textile enterprises reflect that the order is about to be completed, facing the risk of "grain loss", and even some enterprises have resumed their holiday soon after resuming work, or intend to lay off workers. In order not to shut down, there are enterprises ready to produce standard products to facilitate future delivery. It can be seen that the days of spinning enterprises are not easy, especially that SMEs will face "big exams". They should be vigilant to guard against the "collapse tide" and "unemployment tide".

At present, the negative impact of the global epidemic is not yet fully apparent. However, the reduction of global cotton consumption has become a consensus in the industry. The impact of the development of the epidemic on the industrial chain needs to be closely monitored in the late stage.

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