Review And Prospect Of China's Wool Market In 2011

　　 (1) the performance of China's wool textile industry.

China is the largest in the world. wool Importing countries, producing and processing countries and consuming countries have become global Wool textile industry The decisive force. The latest data from the International Textile Machinery Association show that China's wool spinning spindles account for 25% of the world's total, and wool textile machines account for 20% of the global total. The International Wool Textile Organization forecast data in 2010, China is the world's largest exporter of wool yarn, the second largest wool. Fabric Exporting countries (after Italy), the largest exporter of wool knitted sweaters, the second largest exporters of wool woven men's and women's garments.

In 2010, the gross textile (non garment) industrial output accounted for 11.4% of the textile industry (non clothing), wool textile and wool. clothing Exports amounted to US $8 billion 436 million, accounting for about 4% of the total export volume of textiles and clothing. Influenced by the upgrading of China's industrial structure and the impact of the international financial crisis, China's wool and wool textile industry also appeared the same structural changes as the international wool textile industry after 2005. First, domestic wool has been reduced and imported wool has increased. In 2009, the number of sheep stocks in China decreased by 24.8% compared with that in 2005, and the output of wool was reduced by 7.4%, and that of imported raw wool increased by 23.4%. The proportion of China's raw wool processing increased from 28.26% to 32.12% of the world's raw wool output, and two was the increase in per capita labour productivity. Over the past 5 years, the number of employees in Enterprises above designated size has decreased by 6.8%, and output value has increased by 82%. Three, in the past 5 years, domestic demand and export structure changes, export delivery value has increased by 32%, and domestic sales value has increased by 107%; four has increased export value greatly, and export of wool textile and wool products has increased by 49.6% in the past 5 years, of which the number of exports has dropped by 22%, the export volume has increased by 22%; the export volume of wool fabrics has declined, the export volume has declined;

　 (two) the situation of wool imported from China.

According to statistics from China Customs, China imported 333 thousand and 400 tons of wool in 2010, reaching a record high. Among them, 265 thousand tons of raw wool, 49 thousand and 600 tons of washed wool and 15 thousand and 400 tons of wool.

China's gross wool demand is 457 thousand tons, while the world's wool output is about 1 million 83 thousand tons. Therefore, China's wool demand accounts for 42% of world wool production and is the highest among all countries in the world. In 2011 1-6, China imported 145 thousand and 400 tons of raw wool, down 2% from the same period last year.

Although China's gross wool imports have increased, imports from various wool suppliers are also different. China's imports from New Zealand reached a peak of 14.5%, making up for the decline in China's domestic wool supply (similar to the fineness of wool in New Zealand, but lower in quality).

On the contrary, China imported wool from Australia down 2%, because competition from buyers from other Western European countries such as Italy has led to an increase in Australian wool prices. So Chinese factories have shifted their attention to other countries such as Russia, Kazakhstan and South Africa (the first half of 2010). China's wool imports from these countries increased by 8% in 2010. {page_break}

　 (three) review of wool market.

With the expansion of global liquidity, financial attributes such as wool and other large resource products are becoming increasingly prominent. Because of the natural climate, the bad price of meat and meat, the competition of other fibers, the global economic crisis and so on, the world's wool production has declined sharply over the years. With the revival of the European and American markets, the pick-up in the limited industry demand and the extremely short supply of wool, the market is booming. Some of the countries which have long been absent in the Australian wool auction market are rapidly returning to the Australian wool market, including Italy, Turkey and Germany, as well as New Zealand and Uruguay. Compared with the past, the number of Australian wool purchased in these countries has doubled or even more, exacerbating the intensity of the supply of wool.

As one of the few countries with stable economic conditions in the western society, Australia's currency, the Australian dollar exchange rate, has been strengthening all the way, rising from 0.8 to 1.10, and it is also stable at 1. It indirectly promoted the additional price of wool in US dollars.

Since the last meeting of wool in September 2010, the wool market has continued to grow strongly, with only a few minor adjustments during the period and no roller coaster market like other textile materials such as cotton. Taking the Nanjing wool market index as an example, it rose by 53% from 5913 in September 17, 2010 to 9050 in July 23, 2011 this week in Australia. This is in line with the global gross price, becoming the biggest increase in more than 20 years. It is no exaggeration to say that this is the best market I have ever entered in this industry for more than 20 years, even exceeding the well-known round of market quotation that we introduced in 2002.

However, we still have to pay attention to the phenomenon that domestic prices are still hanging upside down. Many enterprises, in order to avoid trade risks and financing pressure, have to go back to domestic Renminbi purchases directly from foreign suppliers. This also led to the fact that domestic importers also concentrated on enterprises with strong financial strength and better risk management. {page_break}

Wool Market Outlook

There are many factors that affect the later trend of wool price. I want to discuss with you from the following aspects.

(1) China's macroeconomic situation.

At present, we are all concerned about whether China's economic trend is a hard landing or a soft landing in the second half of this year under the Chinese government's macroeconomic regulation and control policy. Because the purchasing managers' index (PMI) index of China's manufacturing industry has strong correlation with the relevant economic indicators, we can observe and analyze the macroeconomic development situation through the study of the trend of PMI. In July, China's Manufacturing Purchasing Managers' index (PMI) 49.3 fell below the 50 mark for the first time in a year. This shows that the annual rate of growth in China's industry is slowing down, which is a conclusive sign for the tightening of monetary tightening measures. Although PMI data fell below the bottom of the 50 divide, it does not mean that China's manufacturing industry has been suspended. It only means that the growth rate has slowed down rather than faster. In view of the fact that China's industrial output increased by 15.1% over the same period last year, only after PMI has remained below 50 for several months, can it arouse people's deep concern about the pace of the expansion of manufacturing industry. "PMI" HSBC, which released PMI, said that although the growth rate of industrial output slowed down in the next few months, the growth of gross domestic product (GDP) should remain at "nearly 9%" level for the rest of this year.

(two) domestic macroeconomic policy forecasts for the second half of the year.

The CPI growth rate in the second half of the year is still sticking to high expectations. The National Bureau of statistics issued macroeconomic data. In July, consumer prices (CPI) rose 6.5%, a 37 month high. Food prices rose by 14.8%, and factory prices (PPI) of industrial goods rose by 7.5% over the same period last year.

At the beginning of August, the debt problem of the United States just subsided, and the European debt crisis spread to Italy and Spain. Worries about the "two bottom finding" of the global economy have been on the rise. Some people in China hope that China will moderately relax macro-control efforts. However, most analysts expect that the current domestic price index is high and real estate prices remain high, and the short-term internal policy will not relax at least.

Since January 2010, the Central Bank of China has implemented 12 increases in the deposit reserve ratio (up to 21.5%), and the 5 increase in interest rates (the current one-year deposit interest rate is 3.5%). Under the premise of lowering inflation and protecting people's livelihood, if the statistics bureau announces higher than expected value, it will further increase the possibility that the central bank will raise interest rates again or introduce other tightening policies. {page_break}

　 (three) RMB exchange rate.

The International Monetary Fund (IMF) has always said that the valuation of the renminbi is still too low. However, rising consumer prices have helped to fix the previously undervalued issue, and the appreciation pressure from the current account surplus has also declined. Inflation will not drop, and the renminbi may even begin to overestimate.

China has allowed the renminbi to appreciate by 5% every year since 2005, only to suspend appreciation in 2008-2009 years. From a theoretical point of view, the renminbi is not cheap. In May this year, I went to the United States and found that the price level of the United States was somewhat cheaper than that of China at some levels. In Wangfujing, Beijing, the cost of drinking a cup of coffee or tea is no less than that of New York. Prices such as housing and other non global markets remain unchanged. Rising public utility costs have reduced the competitiveness of Chinese goods, even if the nominal exchange rate has not changed.

　 (four) export pressure of Chinese woollen products.

The global stock market crash caused by S & P's downgrade of US sovereign debt credit is alarming. Whether the next step will trigger a global currency devaluation competition is also worth noting. As the United States is the second largest trading partner after China's second only to the European Union, the pressure on the depreciation of the US dollar and the appreciation of the RMB has further increased, and the economic recovery has been blocked, resulting in a shrinking demand in the US. At the same time, expensive raw material prices also affect the acceptance of export prices, affecting the final customer's determination. {page_break}

　 (five) wool supply.

As the world's largest Merino wool producer, Australia's Wool Production Forecasting Committee released the latest 2010/11 wool production forecast in early August. Wool production in 2010/2011 was 345 thousand tons, up 0.6% over the same period last year. Wool production in 2011/2012 was 355 thousand tons, up 3.1% over the same period last year. After last year's rising market, the original stock wool has been sold out, and the number of wool that can actually be listed will not exceed the predicted quantity.

Other major wool producing countries, such as New Zealand, South Africa and Uruguay, have predicted a decline in wool production to varying degrees.

According to the latest statistics, the number of sheep in every country has begun to increase, but the impact on the increase of wool production still needs a period of support. Therefore, the problem of supply shortage can not solve the supply problem as quickly as cotton can by expanding the sowing area. This leads to the next factor, the competitiveness of wool and other fibers.

(six) competitiveness of wool and other fibers.

Mr. ChrisWilcox, chairman of the Information Committee of the International Wool Textile Organization, has built up a good model for everyone on the basis of data accumulated over the years. According to his model, if wool price and cotton price ratio exceed 4.5 for many years, and chemical fiber price ratio is over 3.65 for many years, the competitiveness of wool price will drop.

At present, the price ratio of wool and cotton exceeds 5.6, and the price ratio of chemical fiber is over 5.4. This means that in the later stage, when the supply and demand of the market remain unchanged, wool will be replaced by other fibers instead of wool, and the demand for wool will decrease and the price will fall.

　 (seven) inventory situation of Chinese enterprises.

At a time when the price of wool is running high, the upstream enterprises of raw materials are more and more accepted by buying more raw materials according to their orders because they bear more market risks and financial pressure. In the process of wool top processing, it is clearly not going to be a big inventor.

Because of the increase in wool prices last year, many textile enterprises in the middle and lower reaches were caught unprepared. In the first half of this year, many enterprises also continued to reserve raw materials in advance. According to WIND information statistics, in the 14 Chinese textile companies listed in the announcement, in addition to 3 ST companies, the remaining 11 raw materials inventory exceeded 20 million yuan or more. Some leading enterprises have more than 100 million yuan stock of raw materials.

In the past few months, the market demand for worsted and woolen fabrics has been weakening. The whole industry is in a period of transition. The finished goods inventory is at a relatively high level, which makes it difficult for the textile industry to increase raw materials inventory in a few months.

The first week in Australia this year coincided with the outbreak of the credit rating decline caused by the US debt crisis. During the week, the stock market, exchange rate trading and wool auction had experienced a "roller coaster". A lesson has also been given to us in time. The current wool trade is no longer what it used to be. Any unexpected event in the world is bound to cause a chain reaction to the market. In particular, many enterprises in China have formed a psychological state of "buying or selling" over the years, and the new trade pattern will have a great impact on domestic wool textile enterprises. This friendship reminds us that we should calm down and observe the changes in the market, fully analyze the relationship between supply and demand and development trends, and consider the timing of the launch according to our actual needs.