Since September, the term “tight supply” has been ringing in our ears. Especially after mid-September, whether it is the raw material or terminal fabric market, dramas such as production limits and suspensions will occur from time to time. Normalized control will lead to foreseeable inventory reductions and shortages in the later period, and tight supply and demand will continue to ferment in the later period. Although the terminal is relatively flat now, the rising prices on the raw material end are getting stronger and stronger.
Cotton rose sharply on the 27th. I think it was the largest increase this year. Several contracts once reached their daily limit. Finally, the 01 contract closed at an increase of 6.78%, an increase of 1175 points, one day. The market has recovered from many months of declines and reached new highs. The market suddenly came out of pessimism. Some people started shouting the slogan of breaking through 20,000!
In addition, not only cotton, but also the entire raw materials involved in the textile industry chain are ushering in a bright moment!
How will the market outlook go? Will the “blooming” of textile raw materials continue to shine or wither in one day? Let’s talk.
According to data, Jinjiu is often the peak season for the industry, which should be full of orders and high load. Affected by the dual energy control during the year, the load of yarn, weaving, printing and dyeing sectors not only did not increase, but dropped sharply, and they were all lower than the same period. In the first ten days of September, with Nantong as the axis, the Jiangsu region gradually radiated to the periphery. Production restrictions and declines continued to escalate. Weaving factories with high energy consumption and low added value were the first to bear the brunt. After mid-term, the power rationing and decline rate of textile factories also increased significantly. As the main cotton producing area in Shandong, the voice of power rationing is endless. There is no need for power rationing just because you are a large taxpayer, nor can you escape the power rationing just because you are a small and micro enterprise. electricity. Turning to the second half of the year, power cuts in Binhai Industrial Park in Keqiao, Zhejiang are particularly worrying for industry players. In particular, the downstream industries are already weak. Keqiao’s annual printing and dyeing capacity is over 10 billion meters, which relieves the pressure on the accumulated inventory due to the power cuts effect. The gauze is under pressure again, and even if the restart time is advanced from the 30th to the 26th at the end of the month, the news effect on the market has already been fermented. Meng Wanzhou’s return to China may once again improve demand.
As an export-oriented country, textile exports account for a large proportion. However, recently due to Foreign stocking is coming to an end, domestic demand is poor, and textile mill profits are shrinking, resulting in no one paying attention to the downstream industry. However, Meng Wanzhou’s incident is very reminiscent. Because it was the U.S. judicial department that terminated Meng Wanzhou’s extradition this time, it can be seen as a manifestation of the will of the U.S. upper class. Many people have begun to speculate whether the United States will reconcile with China. If the Sino-U.S. trade reconciliation, then for China’s textile exports are a big plus. During the Trump period, cotton and other raw materials suffered several price drops due to trade war issues. However, if reconciliation is not enough, the prices will rise again, so the slogan of increasing the price of bulk raw materials has been shouted again in the circle.
To some extent, the above conjecture is possible, but it is unrealistic to solve it in the short term. At present, conflicts between China and the United States are intensifying in various fields. Of course, there is also cooperation Some people have suggested that China and the United States may resolve the trade dispute in November. However, the US textile peak season is basically over in November. There is just a time lag. So can domestic textile raw materials continue to surge? This requires a question mark.
It should also be noted that the lingering presence of the epidemic makes it difficult for demand to surge. Currently, there are sporadic epidemics in Heilongjiang in the northeast and Xiamen in the southeast. It is estimated that This will be the norm. Domestic demand can hardly be counted on, so it can only be driven by external demand. This is what Meng Wanzhou associates with Sino-US trade issues. Currently, we are in a situation where domestic demand is sluggish and external demand is not very good. The domestic power restriction policy has covered up this problem to a certain extent. However, demand is still a major factor that will dominate the market trend in the later period.
To put it simply, when the price is low and the supply is low and there is speculation, the price will have a certain motivation to rise. When the market is at a high level, it needs to be seen whether the demand can support the price. It remains at a high level, supply determines the bottom, and demand determines the top, and what Meng Wanzhou thinks of when she returns to China is just an inference, which cannot completely follow this logic.
So in this context, when the price is at a high level, as an industry, timely lock-in and hedging becomes even more important. In this year’s chaos, there is a stable profit. Much better than pursuing extremes. The editor would like to remind you that when the market is crazy, it is even more important to stay calm, not to mention that similar scenarios have been staged before. Although it seems that the recent textile raw material market is still easy to rise but difficult to fall, in the face of long-term market conditions, market participants still need to be cautious and never fall into the same “pit” twice. </p
