The cotton spinning sector has been suppressed in recent years. It seems that there has not been much good news in recent years due to the adverse impact of the epidemic last year and the trade frictions the year before last. However, these two contradictions have also appeared to a certain extent this year. With the degree of relaxation, cooperation replacing confrontation and the gradual injection of the new crown vaccine, does the cotton spinning sector still have investment opportunities after experiencing a wave?
01 The global economy gradually recovers, and downstream demand slowly recovers
In March 2020, the amount of my country’s textile exports exploded rapidly, hitting new highs in several years. A very important reason for this is that overseas demand for anti-epidemic supplies such as masks has increased significantly, while textile raw materials such as cotton do not account for much. What deserves more attention is the demand for clothing and clothing accessories. This data bottomed out in June last year and is slowly recovering. It is now close to the level of the same period in previous years. Since China has already entered the post-epidemic era, its subsequent driving force mainly comes from the recovery of other major European and American economies.
Judging from the signs in Europe and the United States, there are indeed signs of recovery. Vietnam’s textile exports can be regarded as a leading indicator of the EU’s economic recovery. Judging from the current data, its textile export value is also higher than the same period in previous years, while US retail and food services are regarded as a leading indicator of the US economic recovery. From the cumulative In terms of year-on-year data, it is also growing at 5% year-on-year. It can be seen that both indicators are improving, so I am still optimistic about the future recovery of major economies.
02 Domestic downstream consumption is strong and inventories remain at a low level
Cotton downstream inventories, yarn and gray fabric inventories are also significantly lower than the same period in previous years. This low inventory level also proves that the downstream recovery of the housing industry is obvious, and with the arrival of the seasonal peak season, its downstream supply situation is expected to continue to be tight.
03 The state’s cotton reserves have dropped to a low level
The most important thing is that the state’s cotton reserves have dropped by 1.67 million from more than 10 million in 2014-15. tons, the national reserves of cotton have been exhausted, and the important factors restricting the surge in cotton prices have changed significantly.
Overall, cotton is expected to show an upward trend.
As another cotton spinning variety in futures, short fiber is also worthy of our attention.
04 Introduction to staple fiber
Polyester is polyester fiber, a downstream product of PTA. It is the largest output and most widely used variety among chemical fibers. , accounting for more than 80% of my country’s chemical fiber output.
Polyester has the characteristics of high strength, good abrasion resistance, good light resistance, and stiffness. However, compared with natural fibers, it has disadvantages such as poor air permeability, hygroscopicity, and dyeability. Polyester is widely used in textiles such as clothing, bedding, various decorative fabrics, special fabrics for national defense and military industries, as well as industrial fiber products such as filter materials, insulation materials, tire cords, and conveyor belts.
According to length, polyester can be divided into two categories: short fiber and filament. Polyester staple fiber is a short fiber that looks like cotton and is tens of millimeters in length. It can be made into fabrics by spinning or non-woven processes. Polyester filament can be several kilometers long and can be used directly for weaving without spinning.
Polyester staple fiber (hereinafter referred to as staple fiber) is a short fiber obtained by spinning, drawing and cutting polyester (PET) produced by polymerizing PTA and ethylene glycol in a molten state. . Since it entered my country in the 1970s, its market size has developed rapidly due to its wide range of uses and low price, and it has become an important raw material in textile, clothing, home textile and other industries.
Virgin staple fiber is made from PTA and ethylene glycol as raw materials through polymerization, spinning and cutting. It is commonly known as “big chemical fiber”. Regenerated staple fiber is mainly made from recycled PET bottles, etc., and is produced after drying, melting, spinning and cutting. It is commonly known as “small chemical fiber”.
05 The short fiber basis difference has been quickly repaired, and the safety margin has been improved
Short fiber varieties have maintained a high premium since they were launched, with the premium remaining at 600 On the left and right, with the rapid strengthening of short fiber spot prices recently, the basis difference of short fiber has also been quickly repaired, and the premium is now not much. The margin of safety has also been improved to a certain extent.
Judging from the seasonal trend of short fiber, short fiber has been more likely to get out of the strong seasonal upward trend from June to September in recent years. The market tends to fluctuate from March to May, and futures may be more worthy of focus in September.
06 The inventory level of short fiber is low, and it is still easy to rise but hard to fall
Whether it is the number of days of domestic polyester staple fiber inventory or the The number of days of loom inventory in Jiangsu and Zhejiang has hit a record low. With such low inventory levels, short fiber fundamentals are still relatively strong. Generally speaking, the pattern of easy to rise but difficult to fall will remain.
In summary, opportunities have fallen, and there are still opportunities for cotton and short fiber after adjustments. </p
