Weekly Market Dynamics (April 7, 2020 -4 12)

Raw material end: price rebounding, cotton textile enterprises purchasing cautiously, inventory level as a whole decreased earlier.

Product end: order reduction, price pressure downward, gauze inventory rise.

　　 cotton

During the week, the growth rate of newly diagnosed cases in Europe was slowing down. The major international oil exporting countries agreed to cut oil production, and confidence in the international market was warmer than before. Commodity prices rebounded and cotton rebounded as futures prices were also expected. However, due to the shortage of downstream orders and the pressure of funds, cotton mills are more cautious in purchasing cotton and their stocks are on a downward trend. According to the Research Association of China Cotton Association, when the cotton inventory in the past 1 months or more, enterprises accounted for 45%, reaching the lowest value in two months, while the inventory within 2 weeks of the business increased significantly to 27%, an increase of nearly 10 percentage points from the previous week, the highest value in two months.

Chemical fiber staple

During the Qingming Festival, polyester staple fiber was driven by the rise in crude oil prices, and prices rose strongly. Most regional quotations rose to 5800-6000 yuan / ton interval, but there were also difficulties in some areas. In contrast, the viscose market is flat, prices remain weak, and viscose factory stocks are rising. The sharp rise in the price of PET staple fibres did not stimulate the enthusiasm of cotton textile enterprises to purchase. According to the research conducted by China Cotton Association, the non cotton fiber stocks accounted for 1/3 of the cotton spinning enterprises in 2-3 weeks, while those in inventory less than 1 weeks accounted for 16%, an increase of 10 percentage points from the previous week, the highest value in two months.

　　 Cotton yarn

As the impact of the epidemic on the global consumption and supply chain continues to intensify, a large number of foreign trade orders are cancelled or delayed, and export enterprises turn the market to the domestic market, coupled with the slow recovery of the domestic market, the intensified competition in the domestic market, and the downward pressure on the prices of the products, especially the cotton yarn products falling by 1000~1500 yuan / ton. According to the investigation of China Cotton Association, more than 90% of the enterprises that export have indicated that export orders have declined, domestic orders have also declined to varying degrees, and the inventory level of cotton textile enterprises has increased. About 1/4 of the enterprises' products inventory is in 2 months or more. In terms of imported yarn, most of the cotton mills in India remained closed during the week. Vietnamese yarn stock pressure was high and quotations continued to decline. The price of Vietnam yarn and India yarn week decreased more than that of domestic pure cotton yarn.

Grey

At present, the downstream market is still not fully recovered, and the warmer pace is lower than expected. Most enterprises quoted prices continue to decline. Through the investigation and understanding of China Cotton Association, the opening situation of Zhou weaving factory has been maintained as a whole, but there is a downward trend. The capacity utilization of large enterprises is better than that of small and medium enterprises. With the continuous decline of product sales, the number of enterprises that will shut down some production capacity and reduce sales pressure will increase.

Outlook for the future

On the evening of April 12th, OPEC announced that OPEC and non OPEC oil producers reached an agreement on oil production cuts, which will reduce output by 9 million 700 thousand barrels per day from May 1st, and the first round of production cuts will last two months. This news has boosted market confidence and signs of recovery in the international financial market. In a recent visit to Zhejiang, the general secretary pointed out that "danger and opportunity always exist together and overcome danger." At present, maintaining stable operation is particularly important. Therefore, one of the most important tasks of enterprises is to operate steadily. Next, we should pay more attention to the supporting policies of the state and local governments.