Textile Raw Materials, Yarn, Grey Cloth Market Is Bleak, Macro News Can Bring Good?

6/7/8 months, the textile industry is struggling in the middle of the sluggish season, with scarce orders, difficult shipments, low start-up prices, high inventory prices and tight funds. The fundamentals do not give enough strength to the textile industry for nearly three months, but the recent macro news is frequent. The Fed cut interest rates, trade relations change again, exchange rate breaks "7" and so on. Will this change the current status of the textile industry? Will it reverse the current embarrassing situation in the textile industry?

Textile raw materials

Figure 12019 price chart of raw materials in 5-8

According to my agricultural product network, since May, cotton 3128B price has decreased by 1649 yuan / ton, or 11.60%; polyester staple fiber price has dropped 1250 yuan / ton, or 14.45%; viscose staple fiber price has dropped 800 yuan / ton, or 7.02%. It can be seen that the weak demand and the contradiction between supply and demand make the prices of the three major textile materials have dropped sharply. Raw materials are the source of the textile industry, and the raw material market is still the same.

yarn

Fig. 22019 price chart of yarn in 5-8

According to my agricultural product network, since May, the C32s price of pure cotton yarn has decreased by 1960 yuan / ton, or 9.34%; the R30s price of cotton yarn has dropped 1020 yuan / ton, or 6.27%, and the T32s price of pure polyester yarn has dropped 1800 yuan / ton, or 14.17%. Yarn prices tend to take raw material market as a weathervane, and raw material prices fall sharply.

Grey

Figure 32018-2019 price chart of pure cotton grey cloth

According to my agricultural product net, the price of pure cotton cloth has been reduced by 0.6 yuan / meter in the past three months. Grey cloth industry itself has a very limited profit level, and the collapse of prices overlay the depression of the order environment, resulting in a serious backlog of grey fabric inventory. And with the approaching of high temperature, most of the weaving mills have a miserable and miserable situation to avoid serious losses in the off-season, holidays and reduction in production.

Generally speaking, the textile market in recent months is everywhere green, and the price of the yarn is down. And the recent macro news continues, is it good or bad for the textile industry?

Macro news

First, the interest rate cut: in August 1st, the Federal Reserve announced a 25 basis point cut in interest rates, reducing the target range of the federal funds interest rate to 2%-2.25%. According to the logic, the rate cut is a great benefit to the market, but the decline is too small, less than the market expected. The price of PTA, cotton and cotton yarn has dropped slightly, so the interest rate cut has little effect on the improvement of the textile off-season.

Second, the exchange rate broke "7": in August 5th, the RMB exchange rate broke again from 2008 to "7", which constituted a great advantage for export trade. Generally speaking, the depreciation rate of RMB is 1%, and the profit rate of textile and garment industry is increased by 2%-6%. Foreign trade enterprises benefit directly, and of course affect the market of the whole textile market in the second half of the year. If the exchange rate has maintained a "7" high level, on the one hand, it can hedge the additional cost of trade relations. On the other hand, the high exchange rate can lower the fabric price, while low price will drive the desire of buyers at home and abroad, and then drive the market of upstream gauze to boost the "golden nine silver ten". If the exchange rate returns below 7, or it will pour a great deal of cold water on the hard won foreign trade industry, but at present, the exchange rate will return below "7" or need a short time.

Therefore, although the textile market is still in the off-season, and deeply influenced by macroeconomic factors and exchange rate fluctuations, textile enterprises need not be too pessimistic. On the one hand, orders for double eleven and Christmas may come soon. On the other hand, the market mentality is better now, and orders are also somewhat better. Perhaps this year, "golden nine silver ten" will not be too hot, and will not last too long, but believe it will eventually come.