Cheng Sujing, senior analysis of CCFGroup, delivers her report of Discussion on the China cotton yarn and cotton fabric market and Internal and external end market.
Ms. Cheng introduces her report into two parts.
The first part is the operation of China domestic cotton yarn and cotton fabric market. The price, inventory, profit, operating rate, production and marketing data changes of the yarn and fabric market and the overall performance of the imported yarn market are shown through charts and detailed data. It also makes a brief outlook for the future market of China domestic cotton yarn, gray fabric and imported yarn. Ms. Cheng believes that the contradiction between supply and demand of China domestic cotton yarn and cotton fabric is obvious. The inventory of finished products in textile enterprises and weaving factories continues to accumulate, but there has been a downward trend since August, and the main task in the later period is to cut production. The raw material inventory is low, and there is a certain replenishment demand. The production enthusiasm is low, the operating rate is low, and the profit gradually turns positive after a large loss. The overall market is expected to have a marginal improvement. In terms of the imported yarn market, since the price spread between RMB market and imported yarn market was large, there are few ordering opportunities, traders' profits were poor and the imported yarn volume has dropped sharply. In 2022, the imported yarn volume may hit a new low since 2012. From the import structure, carded yarn and low-count yarn are the main product; from the perspective of source countries, Vietnam's yarn volume continues to grow, while India and Uzbekistan have dropped significantly in 2022. Finally, Ms. Cheng also shared some possible countermeasures for enterprises under the current environment, including changing varieties, downgrading products, traders reducing imported yarn orders and switching to China domestic yarn, and China domestic manufacturers looking for ways to export, shutdown and cut production. In the face of Xinjiang cotton ban, they can seek imported yarn or imported cotton spinning.
The second part is the internal and external end market, Chin domestic sales and export sales of cotton yarn and cotton fabric. The epidemic situation has become an important factor affecting China's liquidity. China domestic liquidity has dropped sharply, which has an impact on the economy. The domestic sales of clothing are weak, and the market is looking forward to the arrival of autumn and winter orders. The ban on cotton in Xinjiang and the recovery of the main overseas textile and clothing producing area have occupied China's international market share, and China's textile clothing export share has declined in Europe, the United States and Japan, especially cotton products. High-frequency data in the middle and upper reaches have reported a decline in new orders in India, Vietnam, Bangladesh, Pakistan and other regions, and it is expected that the growth rate will slow down in the later period. The inflection point of strong demand in the United States has emerged, and the growth rate of demand has gradually slowed down or even shrunk in the later stage. The European Union and Japan are also under pressure. The Sino-US trade war and the cotton ban in Xinjiang have affected the textile and garment trade and strengthened internal circulation. The entry into force of the RCEP agreement may increase the circulation in the member states to a certain extent, which is also the development direction of China in recent years.
