Market conditions
01
Last week, the COVID-19 epidemic reappeared in Beijing, and the market sentiment was tense for a time. Then the central bank’s policy of lowering the reserve requirement ratio came one after another. Domestic cotton prices first fell and then rose, and the overall price fell. The national cotton price B index, which represents the sales of standard-grade lint cotton in the mainland, is 12011, down 72 yuan/ton from June 12, a decrease of 0.6%; the settlement price of the main contract of Zhengzhou cotton futures is 11,900 yuan/ton, up 30 yuan/ton from June 12 tons, an increase of 0.25%.
02
Last week, the market rebounded from the U.S. retail sales data in May. Many states in the U.S. The rebound in international cotton prices has been hindered by factors such as the rebound of the epidemic and the renewed tension in Sino-US relations due to the so-called “Xinjiang-related bill” in the United States. The International Cotton Index (M), which represents the average CIF price of imported cotton at China’s main port, is quoted at 68.14 cents/pound. The converted RMB price under a 1% tariff is 11,935 yuan/ton, an increase of 21 yuan/ton from June 12. 0.18%.
03
Last week, most of the quotations of polyester staple fiber manufacturers in Jiangsu and Zhejiang were stable, and shipments were discussed. The mainstream quotation for 1.4D is around 5950-6150 yuan/ton. Negotiation on actual orders may be around 5700-5850 yuan/ton. Negotiate on a case-by-case basis. Fujian polyester staple fiber quotations remain stable, the market atmosphere is light, shipments are discussed, 1.4D is quoted at 6,100 yuan/ton for short-distance delivery, and actual orders are negotiated at 5,800-6,000 yuan/ton. The price of polyester staple fiber in Shandong and Hebei has been adjusted weakly, and shipments are mainly negotiated. Negotiations for 1.4D semi-gloss may be around 5750-5900 yuan/ton, and actual orders are negotiated. On June 19, the polyester staple fiber price index closed at 5,730 yuan/ton, a decrease of 90 yuan/ton from June 12, a decrease of 1.55%.
04
The atmosphere of viscose staple fiber is calm, the demand has not changed much, and the downstream textile mills are receiving The order quantity is not large, and viscose staple fiber has been purchased at low prices many times. The digestion is slow due to the inventory backlog, and the outlook for the market is pessimistic. The current price of mid-end viscose staple fiber is 8,600-8,800 yuan/ton, and the price of high-end viscose staple fiber is 9,000-9,200 yuan/ton. On June 19, the viscose staple fiber price index closed at 8,700 yuan/ton, a decrease of 100 yuan/ton from June 12, a decrease of 1.14%.
05
Last week, the off-season in the textile market loomed, cotton yarn prices were reduced and combed yarn prices fell. More than regular yarn. The price of cotton yarn in India is stable and rising, and the price of cotton yarn in other major importing countries is stable. The price of pure cotton 32S is 18,700 yuan/ton. The price of polyester 32S is 9,980 yuan/ton, which is the same as the previous period. The market sentiment in the rayon yarn market is average, with rayon 30S maintaining at 12,400 yuan/ton. The price of conventional outer yarn is 473 yuan/ton lower than that of domestic yarn. Downstream cotton cloth is sold in small quantities, and the price remains stable.
Industry Operations
01
The latest report from the International Textile Manufacturers Federation (ITMF) states that global textile orders may recover by the fourth quarter of 2020.
Surveys show that from the beginning of the pandemic on March 1, 2020, to June 8, 2020, textile orders around the world plummeted by more than 40%. Orders in all links of the supply chain have generally declined, with orders from fiber manufacturers falling by 42% and turnover by 33%, and orders from spinning mills falling by 44% and turnover by 33%. Weaving mills’ orders fell by 46%, and their turnover fell by 33%. Clothing manufacturers’ orders fell by 37% and turnover fell by 31%.
Despite this, there is still a glimmer of hope and optimism for all parties in the industry chain. When asked when they expected businesses to reach pre-crisis levels again, some 23% of respondents said they expected orders to return in the first quarter of 2021, with 21% expecting them to resume in the second quarter of 2021. Quarterly recovery. 14% of respondents expect a recovery in the third quarter of 2021, while 20% expect a recovery in the fourth quarter of 2020.
02
According to feedback from some mainland cotton warehouses, the current inventory is relatively Stable, the daily out-of-warehouse quantity fluctuates significantly with futures. According to feedback from some textile mills, when the epidemic situation at home and abroad is not fully controlled and yarn stocks are not quickly digested, as long as there is bad news in the market, textile companies will definitely lower their purchase prices. Downstream sales were originally bleak, and coupled with the sharp fluctuations in the raw material cotton futures market, the willingness of textile companies to replenish their stocks has dropped to freezing point. But even so, most textile companies are unwilling to lower prices. The main reason is that the price of lint has increased in the early stage and the cost has increased. If it is lowered again, the losses will be more serious.
At present, the cotton yarn market has entered the off-season in June. At the same time, the overseas epidemic has not yet been well controlled. Local confirmed cases have reappeared in Beijing, and the market is worried about another outbreak of the epidemic. The combination of the above two factors has made the cotton yarn market, which was originally sluggish in sales, even thinner. Textile companies mostly bought goods at the same price to remove inventory, and prices were stable but falling.
03
From the survey of midstream cotton spinning enterprise customers, the recent business operation rate is higher than that in May The demand for OE yarn and 10-16S ring spinning yarn from weaving factories and garment enterprises has decreased significantly. In addition, the demand for carded and combed yarns of 50S and above continues to decline. Some large and medium-sized yarn mills in Shandong, Jiangsu, Zhejiang and other places have suspended production of 60S and above (mainly digesting inventory, and large orders can be arranged according to requirements), and instead focus on production. C21S, 26S, 32S, 40S and JC40S.
A yarn mill in Henan stated that the company’s 60S carded and combed yarn has been discontinued. Considering that domestic sales will still be dominated in the second half of 2020, spring clothing in 2021 will also be mainly in demand. Regular 21S-40S, so in order to ensure production, we focus on the production of carded cotton yarn. If there are insufficient orders, we willThe temperature will rise to 31.2 million barrels per day. By comparison, OPEC members produced 242,000 barrels per day in May, and that number appears to be rising only slightly in June. OPEC warned in a monthly report that despite improving demand, the market would remain in surplus in the second half of the year. The group said it now expects output from countries outside OPEC to be about 300,000 barrels per day higher than previously expected. At present, oil prices continue to rebound, driven by economic recovery (U.S. retail sales hit the largest monthly increase in history) and hopes of defeating the epidemic, as well as the benefits of the OPEC meeting.
Uncertain factors remain
01
Last week, the RMB exchange rate showed an overall depreciation trend, recording 7.0775 on Friday, a weekly decline of approximately is 0.049%. The downward pressure mainly stems from the following points: First, the domestic epidemic has recurred, and Beijing has raised the emergency response level, causing market concerns about the second outbreak of the epidemic; second, affected by the strong US dollar index, the RMB exchange rate is under pressure; third, China and India The seven-week escalation of US military confrontation in the Himalayan border area; fourth, the deterioration of Sino-US relations is another example. Trump said that “complete decoupling” from China is still a policy option. At present, Sino-US relations are still the main driving factor that has dominated the RMB exchange rate in the near future. In the short term, if there is no impact from unexpected events in Sino-US relations and the domestic epidemic can be effectively controlled, the RMB exchange rate trend will continue to remain generally stable.
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