Fabric Products,Fabric Information,Fabric Factories,Fabric Suppliers Fabric News The bad news in the industrial chain continues to ferment, and the industry has experienced “serial” contract breaches.

The bad news in the industrial chain continues to ferment, and the industry has experienced “serial” contract breaches.



The global epidemic has further spread and market panic has intensified. Yarn trading continued to be thin and fell to freezing point. As of April 9, the domestic average price of C32S closed at 19,337 yuan/ton…

The global epidemic has further spread and market panic has intensified. Yarn trading continued to be thin and fell to freezing point. As of April 9, the domestic average price of C32S closed at 19,337 yuan/ton, which continued to fall by 116 yuan/ton compared with the same period last week.

Pure cotton yarn The overall market transactions continued to be light, and inventories continued to climb. Domestic orders were relatively better than export orders, prices continued to fall, and there was a phenomenon of selling goods at low prices in some areas. As of the 9th, China’s yarn inventory index rose to 27.1 days. From the profit point of view, due to the previous round of sharp declines in raw material cotton, although the price of pure cotton yarn has continued to fall, the decline is significantly less than that of cotton. The cost pressure on textile companies has dropped, and spot profits have improved significantly. Currently, C32S’s current profit from buying current cotton is Around 1,000 yuan/ton. However, since the raw material inventories of many textile companies were built years ago, actual profits are still not good, not to mention that sales of finished products are hindered. Without sales, where is the profit?

From the perspective of raw materials, the current spot price of cotton has basically stopped falling. Stable, Zheng cotton even experienced a sharp rise. The reasons are roughly as follows: First, the central bank continues to increase the reserve requirement ratio and interest rates, releasing a huge amount of liquidity. When the stock market and the real estate market ” stalled” due to the impact of the new crown epidemic, the speculative investment volume chose cotton, which has a small plate and small impact. Large varieties are bargain-hunting; secondly, under the influence of cost accumulation and the continued decline of Zhengfu warehouse receipts + effective forecasts, the market has actively “corrected”; thirdly, and most importantly, various natural disasters have continued to ferment this year, among which the new coronavirus pneumonia epidemic The locust plague in Africa and Africa has increased the uncertainty of the global supply of agricultural products. Many countries have begun to restrict the export of agricultural products, and international food prices continue to rise. Under this premise, it is almost an instinctive behavior for farmers to “reduce cotton and plant grain”. In addition, the wildfires in Australia at the beginning of the year have affected Australian cotton production this year, and global cotton prices have entered a retaliatory rise.

However, from the perspective of the entire industry chain, the situation of foreign trade in textile and clothing Under the current situation of mourning, slow recovery of domestic sales, and the gradual “handover of the baton” from Europe and the United States to India and Africa as the “epicenter” of the new coronavirus epidemic, terminal consumption has almost shut down. Moreover, recently, this negative environment has been continuously fermented and passed upstream. The entire industry has even experienced “serial” defaults, which has caused great damage to the entire cotton textile and clothing industry chain. In the past month, affected by the significant increase in the cancellation of foreign trade orders (direct and indirect exports), delayed shipments, and consignees not picking up the goods or even abandoning the goods, some foreign trade companies can only negotiate with textile and clothing companies in order to “self-protect” Termination and breach of contract (some manufacturers’ products have been put on the machine or even 50%-80% completed); in order to pass on the risks of lack of orders and high raw material costs, clothing companies can only selectively cancel contracts with weaving mills and textile companies; pressure After layers of transmission, cotton companies eventually became the end of serial defaults. In fact, under the influence of the international epidemic, no link in the entire domestic textile and apparel industry chain can be “isolated”, and all links in the industry chain must share the risks of the entire industry.

In terms of imported yarn, as of April 9, FCY Index C32S discount The spot price of RMB closed at 19,983 yuan/ton, the same as last week. Among them, due to the impact of the country’s lockdown, as of early April, many ports in India were shut down and more than 50,000 containers were stranded. India’s entire industrial chain, including cotton processing and export, cotton gauze production and sales, clothing, and foreign trade, has been severely impacted. In fact, the speed, harm and low prevention and control capabilities of the epidemic in India have greatly exceeded the predictions of government departments. The WHO and some international medical institutions have unanimously pointed to India and Africa as the next “epicenter” of the epidemic. Although cotton, cotton textile and clothing companies are eager to unlock and lift the ban, I am afraid it is just wishful thinking. Against this backdrop, cotton and yarn production in India is almost indefinitely suspended. Pakistan entered a nationwide lockdown last week, partially delaying trade activities. Although downstream demand has plummeted, cotton yarn prices have increased due to the reduction in production. The sharp drop in the operating rate of textile mills has created conditions for textile companies to increase prices.

In terms of exchange rate, as of yesterday, the central parity rate of the RMB exchange rate closed at 7.0536. From a macro perspective, central banks of various countries have passed the peak of their operations in response to the epidemic, and recent exchange rate fluctuations have been greatly restrained. However, it is worth noting that the United States is a consumption-oriented society, and people’s savings are quite insufficient, which makes employment data more important than some countries with high savings rates. When the epidemic and “stay-at-home orders” are implemented, countries with low savings are sensitive to consumption.��It will almost certainly be much higher than those in countries with high savings rates. Therefore, during this extraordinary period of the epidemic, when the job market data is bleak, the chance of further easing by the Fed increases. CNBC released data on Thursday (9th) local time that 6.6 million Americans filed for initial unemployment benefits last week. This brings the cumulative number of initial jobless claims in the United States to more than 16 million in the past three weeks. If you compare this number to the 151 million people in the last monthly jobs report, this means that the United States lost 10% of its labor force in 3 weeks. Sure enough, the Federal Reserve announced that day that it would inject US$2.3 trillion to stabilize the economy. The Fed’s soft attitude is likely to cause the dollar to correct in the short term, which is also the market’s instinctive reaction. However, analysts say that although the Fed’s measures have boosted confidence, it will be difficult for investor confidence to truly recover before the epidemic truly recedes. Judging from the current situation, if the Fed’s attitude continues to soften, it will probably mean that the epidemic is out of control. In this case, other countries’ lives will not be much better, and other central banks may be more easing than the Fed.

To sum up, this epidemic is a big test for the entire industry chain, and even a test for mankind. Generally speaking, China’s future situation is not optimistic. Resumption of work does not mean resumption of production. Failure to stimulate downstream demand will have a great impact on the entire industrial chain. Internationally, the improvement in the global economy caused by the continuous surge in the United States is just an “illusion.” A large amount of funds brought by the “money printing” mode of major economies are idling in the periphery, and it is difficult to inject them into small and medium-sized entities, even if it can alleviate the problem. There is a problem with the capital chain of some enterprises, but whether the funds can ultimately fall on textile and clothing enterprises is still questionable. “A grain of ashes dropped by the times is like a mountain to everyone and every small business.”

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