Oil Prices Plummeted 300% Down And Endless Cotton Textile Industry Is Expected To Take The Lead In Recovery.

Editor's note: since March 24th, orders for foreign orders have been gradually lifted, and the volume of exports and exports will continue to fall sharply. Domestic textile enterprises are facing second cuts in production and production. Cotton textile upstream raw materials, due to shrinking demand, domestic cotton supply is adequate, cotton prices have been steady in recent days; oil prices fluctuate greatly, the prices of chemical fiber staple fiber continue to decline; viscose staple fiber under the pressure of the downstream market, has reached a record low; at present, cotton textile raw materials overall supply exceeds demand, prices are low.

In the early hours of April 21st, the US crude oil dropped to a negative value in the early hours of April 21st. The WTI5 contract closed at a staggering $-37.63 / barrel, a drop of 305.97%. There is institutional analysis, because the oil storage space of Oklahoma State Library is decreasing rapidly due to the important crude oil delivery area, and WTI5 month is close to delivery, and the cost of developing the warehouse in June is too high, prompting traders to sell in large quantities.

Negative oil prices inevitably led to a great market panic, and the three big indexes of the US stock fell on the same day. The commodity futures market opened today (April 21st). Today, (April 21st) Zheng cotton disk also failed to escape, CF09 fell 2.36% to 11165 yuan / ton; PTA fell 2.64% to 3314 yuan / ton.

　　 Delta WTI5 month crude oil futures daily K line trend

Where will the yarn market go from now on?

Recently, the yarn market has become more and more deserted, and orders are less than in March. In the Foshan market, according to an enterprise, the 26 yarns and 40 yarns that had better shipped in February and March tended to be dull as the initial orders gradually completed. In the Shengze market, except for C32S and JC40S, which are mainly used for jet cotton and cotton series, the demand for other cotton varieties is relatively weak. The market of cotton yarn is sluggish, and the market of pure cotton yarn is weak.

　　 Textile market quotation in April 21st

Source: China cotton net

Due to the large number of foreign trade orders being cancelled, many foreign trade enterprises are turning to domestic sales, and domestic orders are extremely competitive. In a random survey of some enterprises, some enterprises said that textile enterprises had to substantially reduce prices in order to rush orders, and most manufacturers cut their prices by 1000-2000 yuan. Even so, most textile enterprises say it is difficult to get orders, raw materials purchase is also bought with orders, dare not hoard goods, and some enterprises with large inventory of raw materials say that the losses are serious. The current cotton mill and downstream cloth shops mainly focus on clearing inventory and selling goods, the shipping mentality is strong, there are no new orders in the downstream, and the cost of labor, plant, raw materials and other costs leads to enterprises. Eager to ship back the funds, they sell again and again, and the price war in the market is becoming more and more intense, resulting in a vicious circle in the market. Some textile mills simply limit production, shift or holiday to ease operating pressure.

Although the market is not satisfactory, but with the improvement of domestic epidemic situation, the domestic economy is slowly recovering. Most enterprises still choose to persist in their efforts and unwilling to give up easily.

Imported yarn is not ready to sell.

In recent days, Ningbo, Qingdao, Shanghai and other places of cotton yarn trade enterprises reflect not only customs clearance, immediate cotton yarn inquiry, shipments continue to be light, and in the first half of April, just some improvement of "futures yarn" (mainly 5-7 months shipping season) has not been able to sell, especially Vietnam, Pakistan, Thailand and other origin OE yarn, 8S-16S siro spinning demand is getting weaker and weaker.

An import company in Zhejiang said that at present, apart from a small number of medium mix, high C21S-32S package bleaching, self Vietnam, India, Pakistan and Uzbekistan yarn, there are inquiry and shipment, including other JC20S-32S, OE yarn and high count compact spinning. In the first ten days of March, the company began to take part in some parts of India, Pakistan and Uzbekistan yarn contracts, such as breach of contract, cancelling the contract through negotiation, postponed shipment, and so on. From the survey, 3-4 months despite the decline in India's cotton yarn arrivals, but due to more and less imports, China's port cotton yarn stocks continued to rise (bonded + non bonded), some cotton traders pressure mountain.

Cotton spinning industry is going through a "cold winter".

At present, the domestic cotton textile industry is facing more and more pressure. Although the domestic epidemic situation has been controlled, the operating rate of enterprises has tended to return to normal level, but the sharp reduction in orders seriously threatens the survival and development of enterprises. According to official statistics, the spinning and weaving industry is a major disaster in this recession.

According to the National Bureau of statistics, in March, the industrial added value of above scale actually decreased by 1.1% compared with the same period of last year. According to three categories, the added value of the mining industry increased by 4.2% compared with the same period last year, the decrease in 6.5% was 1-2, the manufacturing industry decreased by 1.8%, the decline narrowed by 13.9 percentage points, and the electricity, heat, gas and water production and supply industry dropped by 1.6%, and the decline narrowed by 5.5 percentage points. According to the industry, 16 sectors of the 41 categories of industries maintained an increase in value, but the textile industry dropped by 5.5%. It can be seen that the decline of textile industry is obviously higher than that of other industries and industries.

The textile industry is facing three difficulties.

It is understood that the new orders for textiles and clothing are seriously inadequate, and the original orders have been cancelled or delayed. According to rough statistics, enterprises with insufficient orders accounted for more than 6.

Xu Kemin, director of industrial policy and regulation department of Ministry of industry and information technology, said that the current international epidemic is spreading rapidly, and the textile industry, especially small and medium-sized textile enterprises, has the following difficulties:

One is the lack of demand. From the domestic perspective, the retail sales of clothing, shoes and hats and needle textiles in the domestic market exceeded 31% from 1 to February. Internationally, since March, a large number of export orders have been delayed or cancelled, and new orders have also been decreasing significantly. According to the latest survey results of more than 100 key enterprises in China Cotton Textile Industry Association, the proportion of enterprises with insufficient orders is 63.6%.

Two, the pressure of steady employment in the industry is increasing. The pressure of order reduction is being carried out along the industrial chain to the upstream, which will have an impact on the normal operation of the textile industry chain, and the employment situation in the industry is becoming grim.

Three, enterprises reflect financial constraints. Affected by the decline of orders and withdrawal, the inventory backlog of raw materials and finished products of textile enterprises is increasing, especially in the chemical fiber industry. Because continuous production can not be stopped, the inventory pressure is occupied and the amount of capital is also increasing.

Therefore, the contradiction between capital and production is becoming more and more prominent. In order to reduce expenditure, enterprises can only be forced to cut down production.

According to the enterprises surveyed, the pressure of business operation began to increase in late April. According to the development of foreign epidemic situation, it is estimated that the external demand from 4 to May will drop to a low level, and the test will be even more brutal. In view of the severe market situation, enterprises can only reduce expenses and reduce expenses. After all, living is the most important thing.

Cotton textile industry is expected to take the lead in getting out of the "mire" of the epidemic.

At present, the domestic epidemic has achieved a phased victory. Enterprises resumed their work and resumed production continuously. As of mid April, the recovery rate of large and medium-sized textile and garment enterprises generally reached over 80%. (Zhejiang, Jiangsu, Shandong and other coastal areas had a higher rate of return), and the focus of the national economic work shifted to protecting production, ensuring employment and protecting exports.

Since April, the domestic market of cotton, cotton yarn, grey cloth, clothing and so on is still in the doldrums, but the overall price has a steady trend. Cotton and polyester short appeared a small rebound in early April, and the confidence of cotton companies and investors gradually picked up.

So, cotton textile enterprises are expected to take the lead in getting out of the "mire", and the production and marketing will achieve a peak?

One

The outbreak of the new global crown epidemic (Europe and the United States and other countries become "epicenter"), because China implemented strict measures to prevent and control the city, the first control of the epidemic, enterprises resumed and resumed production to take the lead in recovery. By the end of 3, the rate of resumption of Industrial Enterprises above Designated Size had increased to more than 90%, and the recovery rate of SMEs has exceeded 80%.

Two

The domestic market has become the "engine" of consumption, effectively lifting the production of textiles and clothing. Global consumption has shrunk sharply in the first quarter, resulting in a sharp decline in foreign trade orders and a decline in shipping demand, and export oriented textile companies and trading companies have been hit hard. But China is still the second largest consumer market in the world. The gradual normal economic activities in China will help to restore the domestic market.

Three

Stable foreign trade measures fall to the ground, and China's textile and clothing orders are expected to stabilize. In April 7th, the Executive Council of the State Council again launched a series of stable foreign trade policies, and launched a policy of "combined boxing" to strive to stabilize the basic foreign trade market.

Four

India and parts of Southeast Asian countries outbreak, European and American brand spinning orders will flow back to China. With the extension of India's seal up to May 3rd, there was a large scale stoppage and shutdown of the mills, cloth factories and garment factories, and the suspension of the major ports. Pakistan, Bangladesh and other textile giants epidemic situation is not optimistic. Therefore, once the international demand starts, buyers or retailers from Europe and the United States will choose China.

Five

Recently, with the slow growth of new confirmed cases worldwide, anti epidemic measures in various countries around the world have begun to work. As Italy, Spain and France showed signs of a slowing of the new crown pneumonia epidemic, multinational leaders began to explore relaxation measures to ease economic pressure, while the US also planned to press the "restart button". The market believes that the restriction of appropriateness and relaxation will symbolize the revival of global economic activities. People's demand for textile end products will also be restored, and cotton consumption is on the way to recovery. Although the darkest hour of consumption continues, the worst of the market has passed, and the strong trend of the outside market also provides support for stabilizing the domestic market. In this context, enterprise decision-makers should make the right decisions.

Cotton spinning industry chain layout

From the whole terminal market, the fast fashion brand has been greatly affected by the epidemic. However, through this epidemic, the products with high quality and taste and high quality and high grade, which are integrated with the advanced concepts such as the concept of environmental protection, the concept of antibacterial, the concept of energy, the concept of skin affinity, the concept of warmth retention and the concept of softness, are still being consumed. People's favor and market demand increase substantially, which should be the focus of the terminal brand in the late stage of epidemic.

The epidemic has great impact on the economy and the international impact is far beyond expectations. From the negative factors, domestic consumption may have a negative cyclical phenomenon, resulting in consumption problems from the employment problem. From the positive factors, it may change our way of life, and the demand for clothing is more focused on environmental protection, practicality and simplicity.

From the perspective of enterprises, we should pay more attention to three points in future development.

First, insist on making products with distinctive characteristics and cost-effective products, and create their own core competitiveness.

The two is to vigorously develop online sales channels. At present, the development of online sales is better, but the problem of supply chain docking and information asymmetry is also prominent. Customers generally require delivery within 15 days, and no reason to return for 7 days is a test for the production enterprise. How to link the traditional industrial chain with the electricity supplier well and increase the symmetry of data information is the direction that enterprises should consider in the later stage.

Three, the demand for functional products and large health products is getting bigger and bigger. This is also a category that enterprises should pay close attention to.