Research On Guangfo Cotton Spinning: Is Cotton Demand Changing?

After the outbreak, I set out again and was lucky to embark on the research road with a group of cotton related partners under the organization of looking for gauze net. The survey site is located in Foshan, Guangdong Province, downstream of cotton, because the consensus of the supply and demand sides of cotton is concentrated from the existing information, and the differences are mainly concentrated on the demand side.

According to USDA's forecast in July, US cotton production is expected to decrease gradually, and China's reserve demand for state-owned cotton has strengthened its purchase of American cotton under the framework of the first trade agreement, which supports the strength of ice US cotton; In addition, the cotton production in Xinjiang will be more stable with the increase of cotton planting subsidies at home and abroad. At this time, the focus is more on the demand side. The weakness of textile and clothing demand has lasted for many years, and suffered from external factors such as epidemic situation and trade friction. When will it recover?

This survey is mainly conducted by local yarn and grey fabric manufacturers and traders in Foshan. The basic content of this kind of discussion is basically in the form of discussion. The basic content of this kind of discussion is similar, but it is nothing more than telling about the current market situation. For example, the overall market startup is bleak, and the accounting period of a fabric manufacturer has expanded from 45 days in the previous year to more than 100 days Some clues were found, such as the investigation object who completed the production capacity expansion before the end of 19 years, the yarn raw material source of a certain denim fabric manufacturer changed significantly, the largest yarn trader in Zhangcha market kept on calling during the communication process, the trucks on the traffic road were frequent, the weaving factories in Xiqiao market still kept the staff stable at dark hours, and there was no plan to lay off staff. The author does not make too many statements for the survey summary, combined with observation, thinking and subjective feelings, summarizes the following market signs.

1. Domestic yarn in the market share increased significantly. A large denim fabric manufacturer in Flatland market found that 80-90% of its yarn raw materials were imported from overseas, mainly Pakistan yarn, and now mainly domestic yarn. It is not difficult to find that with the low price difference between the internal and external yarn prices, the profit margin of imported yarn shrinks significantly compared with that of domestic yarn, and the market makes a choice by foot voting. Whether this advantage can be maintained in the future depends on how the price difference between domestic and foreign cotton is deduced. Under the background of the normal rotation of reserve cotton and the acceleration of the procurement progress of national reserve from the United States, the pattern of weak cotton price at home and strong abroad will continue, and the advantage of domestic yarn will further drive the recovery of domestic cotton demand.

2. There are signs of recovery in foreign trade. At the same time, the domestic trade order is still slow down. Cotton textile enterprises, especially foreign trade oriented enterprises, are cautious in business operation, suspending overseas office operations to ensure the safety of employees. However, we also know from some textile foreign trade enterprises and some shoe-making enterprises that foreign trade orders show signs of recovery, especially those from Japan, South Korea and Bangladesh. However, the development of epidemic situation in foreign countries should not be ignored. Manufacturers' orders and production activities are still concerned about this.

3. Capital sleepless, money continues to pour into the cotton textile industry. The new factory of a textile enterprise was officially opened in October last year, mainly to follow the rib market. The person in charge said that the boom of rib fabric will continue in the next few years; another research object has plant resources, engaged in cotton textile industry production, but also rents its idle factory buildings for cotton textile products processing; Xiqiao Textile Factory with an average daily production capacity of 50000 meters still maintained stable personnel during the epidemic period; in addition, the economic and capital turned loose, which was conducive to the maintenance of debt between upstream and downstream of the industrial chain. All kinds of signs show that the cotton textile industry is still profitable and confident. Many respondents said that there is limited space for yarn and grey fabric price decline, and even good bottom copy opportunities are expected.

The most worrying thing for futures bulls lies in the fact that domestic clothing stocks are high, but the author thinks that there is a misunderstanding in this cognition, that is, textile and clothing industry is not equal to other bulk industries. From the upstream each batch of cotton has its own unique "ID card number", the market trend of different kinds of grey cloth in the middle reaches is relatively independent, and to the final end of clothing trend, the personalized characteristics of this industry chain can not be ignored. It is not so much that the clothing industry meets people's clothing needs, but that what the clothing industry actually meets is people's demand for personalization and fashion trends. Therefore, in the fast changing fashion trend, the value of clothing inventory in the past is not worth any money, and the fact that clothing inventory is high is not enough to fear.

Based on the above signs, the author has confidence in the recovery of cotton demand, but after all, the industrial chain chain is too long, and the inventory of intermediate yarn and cloth products is relatively high, so the recovery process is difficult to be achieved in one stroke, showing a phased recovery. In addition, there is no obvious turning point in the current epidemic situation in foreign countries, and the attitude of foreign trade merchants is still cautious. In the long run, the demand for textile and clothing is still based on the purchase intention of end consumers. If the online and offline clothing retail gives a bright data in the later stage, it will produce a positive feedback on the industrial chain and adjust the cautious management attitude of the industrial chain.