Recently, the macroeconomic atmosphere has been favorable to the international capital market. The prices of many textile raw materials such as polyester staple fiber, nylon, and spandex have all increased, which has contributed to the rise in cotton prices. With the textile market booming, it seems reasonable to support the rise of Zheng Cotton. . As a benchmark for the textile market, cotton has soared since the Spring Festival holiday, exceeding 16,000 yuan/ton in one fell swoop. Coupled with the abundant liquidity in the market, cotton prices continue to fluctuate upwards, which is a high probability event, indicating that the market’s expectations for global economic recovery have increased and the market sentiment has increased. degree increase. After the holiday, cotton yarn followed the cotton market, with an increase of 1,000-2,000 yuan/ton.
The five major varieties have reached daily limit, and inflation expectations continue to rise
Rising! rise! rise! On February 22, domestic commodities experienced another outbreak, with the five major varieties of Shanghai copper, international copper, ethylene glycol, PVC and soda ash reaching their daily limit. Market expectations for a new round of stimulus plans continue unabated, inflation expectations continue to rise, and commodity prices are booming. Chemicals are enjoying a boom, and varieties led by polyester chains have seen sharp price increases again. Among them, PVC, viscose staple fiber, spandex, ethylene glycol, MDI, etc. have seen larger increases.
The five major varieties in the futures market have reached daily limits, and Zheng cotton has reached the 16,000 yuan mark, continuing to make rapid progress. The domestic textile industry has had a “good start” after the holiday, driving the demand for textile products to pick up, and the popularity has surpassed the fourth quarter of the year before. Analysts pointed out that raw material prices have risen sharply, textile products have entered a stage of comprehensive growth, and the gap between supply and demand is obvious. The textile market in the first quarter is likely to exceed expectations.
Source: Wenhua Finance
The prices of viscose and polyester are gradually rising
Complementing the surge in cotton futures, the other two major cotton spinning raw materials, 1.4D polyester staple fiber and 1.5D viscose staple fiber, have also risen sharply. rise. From February 20th to 21st, the ex-factory price of polyester staple fiber in Jiangsu, Zhejiang, Fujian, Shandong and other places was generally raised to 7,300-7,400 yuan/ton, and the quotation of viscose staple fiber exceeded 15,100 yuan/ton. As crude oil, PTA and other raw materials rose sharply, Driven by this, cotton alternative raw materials polyester staple fiber and viscose staple fiber are also gaining momentum.
Since the fourth quarter of 2020, the price of viscose staple fiber has gradually increased. At the end of 2020, the implementation of the plastic restriction order and the ban on solid waste import policies increased the demand for pulp, accelerated the rise in pulp prices, intensified the shortage of wood pulp supply, and accelerated the rise in viscose staple fiber prices. On February 21, Zhongtai Chemical disclosed that the company’s viscose staple fiber and yarn inventories are currently low and it has certain profitability. The market price of viscose fiber is around 15,000 yuan/ton, and it is expected that the viscose market will fluctuate upward in 2021.
Driven by the continuous rise in crude oil during the Spring Festival, the polyester chain rose across the board, and the market trading atmosphere was good. The average weekly price of polyester staple fiber increased by 360 yuan/ton from the previous month.
Industry insiders said that the strength of the chemical sector is due to many factors. Recently, the prices of most chemical products have continued to rise. The inventory of viscose and polyester filament in the chemical fiber field is currently extremely low. It is a high probability that the procyclical chemical sector will continue to strengthen.
External cotton rose to a two-and-a-half-year high
Intercontinental Exchange (ICE) cotton futures rose to a more than two-and-a-half-year high on Monday It has hit its highest level since investors looked forward to improving cotton demand as the global economy picks up, and expectations of tighter supply also pushed prices higher. March cotton futures rose 1.96 cents (2.20%) to settle at 90.91 cents per pound. The May cotton futures contract rose 1.93 cents (2.13%) to settle at 92.41 cents per pound. At present, whether from the perspective of market sentiment, technology, external economics, or policy, there is a high probability that ICE will test 95 cents/pound.
Relevant analysts said that in view of the strong rise in commodity prices such as soybeans and corn, U.S. farmers are expected to further reduce cotton crop planting area in the next market year, which is expected to give cotton Futures prices provided support. In addition, the decline in the U.S. dollar has also brought additional support to cotton futures.
Domestic cotton follows the rise of foreign cotton
The trend of domestic cotton follows the rise of foreign cotton. On Monday, the futures price of Zheng cotton reached a maximum of 16,500. The yuan pass has fallen back, but the trend is still strong. Zheng cotton fluctuated and rose on Monday, with the 2105 contract closing at 16,300 yuan/ton, up 1.49%. Last night, the futures price adjusted slightly and fluctuated upward at 16,300 yuan. From a fundamental point of view, due to the epidemic this year, “celebrating the Chinese New Year in situ” creates conditions for accelerating the start of work after the holiday, the resumption of production of textile factories is accelerated, and the low downstream textile inventory is conducive to cotton demand and boosting cotton prices. In addition, the large increase in polyester staple fiber has also brought resonance to the cotton market, and Zheng Cotton can still hold long orders in the early and mid-term.
On February 23, cotton futures rose again
As the price of cotton rises sharply after the holiday, the price of cotton yarn also rises sharply. At present, most textile companies have started operations. The yarn stocks of enterprises before the holiday are low, and the expectations for the market outlook are relatively optimistic. In foreign countries, against the backdrop of an obvious upward trend in global cotton prices, foreign cotton yarn prices have also risen sharply. However, actual transactions are not many, and the market has a strong wait-and-see sentiment. Specific data shows that the domestic weekly average spot price of 32-count pure cotton carded yarn is 24,395 yuan/ton, a month-on-month increase of 405 yuan/ton. The domestic weekly average price of 32-count pure cotton carded yarn in India is 24,700 yuan/ton, a month-on-month increase of 412 yuan/ton. . Vietnam 32 count pure cotton carded yarnThe average weekly price was 24,200 yuan/ton, an increase of 438 yuan/ton from the previous month. According to the survey, since mid-February, the price increase of cotton yarn in Jiangsu, Henan, Shandong and other places has been concentrated at 500-1,000 yuan/ton. The price increase of 50S and above high-count carded and combed cotton yarn has generally reached 1,000-1,300 yuan/ton. However, the price increase of pure polyester yarn has reached 1,000-1,300 yuan/ton. Yarn prices only increased by 200-300 yuan/ton.
A textile company in Xuzhou, Jiangsu Province said that the reason why the yarn mill There are three main reasons for daring to follow Zheng Cotton in raising yarn prices:
1. Follow the rise in the raw material market and reduce risks
Spring Festival At present, the inventory of cotton yarn is relatively low (especially the inventory of high-count yarns of 60S and above in some large and medium-sized yarn mills is even lower). The yarn price adjusts rapidly with the fluctuation of raw materials such as cotton and polyester staple fiber, minimizing the risk;
2. Price increases will have little impact on medium and long-term orders
Uncompleted and undelivered orders as of the Spring Festival The quantity is not large, and the impact of yarn price adjustments on medium and long-term orders is relatively limited;
3. The yarn mill has sufficient capital flow
The capital flow of yarn mills is relatively abundant, and the operating pressure is not outstanding from March to April, leaving enough time for downstream weaving enterprises, garment factories and terminals to accept and digest orders, paving the way for a smooth increase in yarn prices.
An import and export company in Zhejiang believes that the pressure of rising prices for cotton, cotton yarn, polyester-cotton yarn, etc. will eventually be shared by multiple parties such as cloth factories, clothing companies, and purchasers. It cannot be solved by a large price increase in a certain link, and all parties at the end need to make concessions.
Situation of yarn and weaving companies in the textile cluster
Pure cotton yarn companies have relatively sufficient orders, and some companies have placed orders after the first quarter and are running well Enterprise orders can be scheduled until June; after the holiday, product inventory levels are low and profit margins are small.
Viscose yarn cluster companies reported that the price of viscose staple fiber increased after the holiday compared with before the holiday, and the price of viscose yarn followed suit; companies have good market expectations for the first half of the year .
Colored spinning enterprises report that orders are relatively sufficient; affected by raw material prices, enterprises are cautious about future market development.
According to the yarn-dyed fabric cluster enterprises, the start of production is basically normal and the order situation is acceptable. Some enterprises need to deliver orders after the holiday, and enterprises are stepping up stocking.
According to denim cluster enterprises, the price of denim yarn continues to rise and orders are sufficient. Most enterprises have already placed orders until April. The beginning of the year is the peak season for denim clothing production and sales. It is expected that orders this year will increase significantly compared with last year; domestic sales companies have more stable and sufficient orders than export companies.
Textile market forecast for the first half of the year
Industry insiders believe that the textile market is expected to continue to strengthen in the first half of the year, and there are the following positive factors:
1. The US$1.9 trillion stimulus plan in the United States has made positive progress
The Biden administration’s US$1.9 trillion economic stimulus plan will be presented to the meeting ahead of schedule. U.S. Treasury Secretary Yellen said on February 18 that although economic growth momentum indicates that the U.S. economy will grow faster than expected in 2021, a large-scale stimulus package is still needed to restore the economy to full growth. At the same time, the overall vaccination in Europe and the United States is rapid, coupled with the continuation of loose monetary policies by the Federal Reserve, the European Central Bank and other major economies in 2021, inflationary pressure continues to be transmitted to the stock market and commodity futures market.
2. The global epidemic situation is improving
The new crown epidemic continues to ease. As of February 14, there were new confirmed cases worldwide within one week. The number of cases is the lowest since October, and the number of deaths has also begun to decline. Factors such as the expansion of vaccination and warming temperatures in the northern hemisphere have suppressed the spread of the epidemic. It is expected that the impact of the epidemic in the future will not be a short-term phased impact, and the intensity of the impact will gradually weaken, with limited impact on the global economy. On February 19, Gao Fu, an academician of the Chinese Academy of Sciences and director of the Chinese Center for Disease Control and Prevention, pointed out that China has now entered the final stage of eradication. Local epidemics in rural areas of Hebei, Jilin and Heilongjiang provinces have been effectively controlled.
3. At present, the raw material, yarn market and downstream market are showing a trend of rising together.
On the one hand, domestic cotton prices are affected by Boosted by the rise in U.S. cotton prices, on the one hand, domestic textile demand has performed better, and downstream textile inventories have been low. At the same time, production profits have been good, which is conducive to increasing production and promoting stronger cotton demand. It is understood that the current inventory of textile products is at a historical low, and March and April are the peak consumption seasons in the first half of the year, which is expected to further drive inventory decline.
Raw materials are rising. Can the cost increase be absorbed?
At present, domestic cotton textile mills, fabrics, and clothing companies are resuming work. The production rate has returned to 80-90%, and a few spinning mills have begun to inquire and purchase raw materials such as cotton and polyester staple fiber. At present, domestic sales and foreign trade orders are arriving one after another from March to April, and there are still some contracts that need to be fulfilled before the holiday. With the support of the external market and fundamentals, ICE and Zheng Cotton have formed a resonance, while downstream weaving, fabric companies and garment factories are expected to purchase from the end of February to early March. Quotations for cotton yarn, polyester-cotton yarn have risen sharply, and textile and apparel companies have It is necessary to accelerate the transmission of cost growth pressure to downstream terminals, and negotiation, stalemate, and acceptance will take time. An import and export company in Zhejiang believes that the pressure of rising prices for cotton, cotton yarn, polyester-cotton yarn, etc. will eventually be shared by cloth factories, clothing companies (or foreign trade companies), purchasers (including foreign brand companies, retailers), etc. A significant price increase in one link alone cannot solve the problem. All parties at the end end need to make concessions.
With the “flooding” of international economic stimulus policies and the advancement of domestic economic easing policies, textile varieties such as cotton and polyester staple fiber may lead the rebound in March and April in spring. The current operating rate of domestic textile enterprises is still lower than before the Spring Festival, but the “Celebrate the New Year in Place” initiative in 2021 has enabled downstream enterprises to resume production and work ahead of schedule. As domestic downstream factories gradually resume work, it is expected to resume production quickly, boosting cotton demand and cotton prices. The upswing is not over yet.
��, a significant price increase in one link alone cannot solve the problem, and all parties at the end end need to make concessions.
With the “flooding” of international economic stimulus policies and the advancement of domestic economic easing policies, textile varieties such as cotton and polyester staple fiber may lead the rebound in March and April in spring. The current operating rate of domestic textile enterprises is still lower than before the Spring Festival, but the “Celebrate the New Year in Place” initiative in 2021 has enabled downstream enterprises to resume production and work ahead of schedule. As domestic downstream factories gradually resume work, it is expected to resume production quickly, boosting cotton demand and cotton prices. The upswing is not over yet. </p