Weekly Market Dynamics (March 23, 2020 -3 29)

　　 Raw material end: Prices continue to bottom, cotton textile enterprises have strong wait-and-see sentiment, raw material procurement is more cautious.

　　 Product end: Market demand weakened, orders reduced, gauze prices continued to decline.

　　 Cotton

At present, the epidemic situation is still fermented further, and the "inflection point" has not yet appeared. In response to the impact of the epidemic on the economy, in March 23rd, the Fed announced that it would buy the US debt and MBS on an unlimited basis and open an unlimited QE mode, with all kinds of assets rebounding strongly. In March 26th, the G20 summit announced that it will launch a $5 trillion economic plan to cope with the negative impact of the epidemic on the global society, economy and finance, and support central banks to take measures to promote financial stability and enhance liquidity in the global market. The global stock market, which has experienced a continuous decline, has finally "kept the clouds open and sees the moon". When the cotton price range was running in a week, the risk of continuing downlink has not yet been completely lifted. Cotton textile enterprises have strong wait-and-see sentiment, and raw material purchasing enthusiasm is not high.

Chemical fiber staple

When the viscose staple fiber was weak and stable, when the downstream textile enterprises purchased more carefully, the stock of viscose factory continued to accumulate, and some enterprises had lowered their quotations, most of them offered early quotations. When the polyester raw material went down again in the week, it was affected by the withdrawal orders from the European and American orders, and the stock of polyester factories increased, and the intention to cut production increased again.

　　 Cotton yarn

With the release of Hubei, more than 90% cotton textile enterprises in China have resumed production. According to the survey data of China Textile weekly, the proportion of the returned cotton textile and chemical fiber industry in the upstream of the textile industry chain, the weaving and dyeing and knitting industries in the middle and lower reaches reaches more than 95%, and the proportion of workers returning to posts has increased to more than 90%. However, affected by the intensification of foreign epidemic situation, more than 60 countries or regions in the world have declared a state of emergency. Some countries or regions adopt the measures of "sealing the country" and "sealing the city". The business of developed countries such as the United States and Europe has been shut down in large areas, leading to the fact that domestic export enterprises are facing the situation of returning orders and abandonment, and the export of China's textile and clothing has been affected. At present, most export enterprises turn the market into domestic sales, and domestic demand has not yet fully recovered, so the shortage of enterprises' orders is more serious. In order to attract orders and inventory, price reduction is a common phenomenon.

In terms of imported yarn, the import trade in India was basically in a state of stagnation in March 22nd. Vietnam's yarn was also greatly reduced in the past 2 months due to the large number of purchases in China.

Grey

In the week, the market of grey fabric was still relatively light. With the cancellation of a large number of foreign orders, the pressure of weaving mills increased. As enterprises generally charge only about 30% of the customer's deposit, the cancellation of orders leads to a relatively large loss of domestic enterprises. Because of fear of being cancelled again, the majority of weaving mills are now cautious about their orders. They turn their attention to China and maintain production through expanding domestic demand and reducing foreign orders.

Outlook for the future

In March 26th, the NDRC issued a policy to improve the target price of cotton in Xinjiang, and the target price level in 2020 was 18600 yuan / ton. The issuance of target price policy strengthened confidence in cotton market and provided strong support for spring sowing of cotton this year. At present, foreign epidemic prevention and control is at a critical stage, and it is expected that the possibility of improving the foreign market in the first half is less likely. With the gradual return of domestic production, the improvement of domestic demand is not far away. Therefore, enterprises should strengthen confidence and rationally lay out production, increase the risk prevention ability of capital chain, and maintain stable operation.