Directional Drop Accurate Release 550 Billion Yuan, May Off-Season Will Turn To Peak Season? When Will Cotton Price Rebound?

Market brief

In March 16th, China Cotton Reserve Management Co., Ltd. planned to purchase 15000 tons of Xinjiang cotton, and the actual turnover was 15000 tons, with a turnover rate of 100%. The average price was 12900 yuan / ton, of which 15000 tons were in the mainland bank. From December 2nd to March 16th, the total number of registered cotton reserves reached 538000 tons, with a total turnover of 245160 tons, of which 12480 tons were accumulated in the Xinjiang warehouse, and 232680 tons were accumulated in the mainland warehouse. A total of 93 enterprises were bidding for the transaction. This week (March 16th -3 20), the highest price limit was 12901 yuan / ton (standard 3128B price), down 243 yuan / ton compared with the previous week. In addition, the Sino cotton storage company and the PICC Guangzhou Branch issued a notice. On the 16 day, they planned to purchase 3000 tons of Xinjiang cotton (fixed weight) through the e cotton warehouse platform. The maximum price was 13144 yuan / ton (standard 3128B price), and the delivery warehouse was Wuhan cotton Co., Ltd.

Zheng cotton prices continue to plummet, short positions increased significantly, following the main cotton will explore 11000 yuan / ton near, can usher in a rebound over the rebound, please pay close attention to news developments. Market pessimism continues, spot cotton prices continue to fall, hedging Cotton Traders and processing enterprises sell new territories cotton at a high price point, the volume of shipments continues to enlarge, while the cotton enterprises with low proportion of non guaranteed or low hedging businesses are reluctant to sell because of the loss growth. Downstream textile enterprises are facing the pressure of accumulation, and cotton procurement is prudent. With the use of mining, the demand for industrial chain is less than that of previous years. Should be more relaxed, the market wait-and-see atmosphere is strong, from the basic point of view, the current cotton price has fallen through the cost, but the central bank 16 directional reduction, release the long-term capital of 550 billion yuan, relative to boost market confidence, short-term cotton prices are expected to continue the low broad trend of concussion.

The acrylonitrile market is weak and consolidated, with a slight reduction in factory quotations. Recently, the acrylonitrile plant has maintained a high level of operation, but some factory inventory pressures have eased. Manufacturers' offer has been temporarily stable, supporting middlemen's mentality of price, and with middlemen's expectation of factory settlement, some businesses are reluctant to sell at a low price. The grid maintained weak consolidation. Acrylic staple fiber prices continue to be stable, 1.5D manufacturers offer a temporary reference of 13700-14200 yuan / ton, raw material acrylonitrile price is weak and shock, acrylic fiber cost support is insufficient, downstream factory orders situation is generally, and many have raw material inventory reserves, raw material purchase mentality cautious, market wait-and-see atmosphere is strong, expect short-term acrylic fiber price stabilization.

The Federal Reserve announced on Sunday that the benchmark interest rate will be reduced to near zero and a new round of quantitative easing of $700 billion will be launched to cope with the impact of the COVID-19 virus on the US economy. The Fed decided to reduce the target range of the federal funds rate to 0 - 0.25 percentage points until it was convinced that the US economy had stood the test and was expected to achieve its biggest employment and price stability target. In addition, the Federal Reserve is ready to use its tools to support credit flows to households and businesses. In the coming months, it will increase US $500 billion in US Treasury bonds and $200 billion in institutional support mortgage securities, and will start buying 40 billion dollars from Monday. Earlier, the Fed announced in the past two weeks that it had cut interest rates by 50 basis points and expanded the overnight credit refinancing scale of the financial system to $1 trillion and 500 billion.

The Shanghai Municipal Government Development Research Center has invited experts, scholars and government officials from all walks of life in Shanghai to take charge of Shanghai's international fashion capital. The Municipal Development Research Center "Shanghai construction fashion capital research group" thinks that building the international fashion capital is the starting point for the transformation of Shanghai's traditional textile industry, and is also an effective way for Shanghai to improve its international competitiveness. International experience shows that textile and garment industry is the eternal and international mature industry of demand, and the transformation to fashion is the only way for its development. In London, New York, Paris, Milan, Tokyo as the representative of the international fashion capital, fashion dress oriented economy has become an important component of the economic, cultural and social life of these international metropolis.

In March 15th, the China Textile and textile international sourcing center was opened, and buyers from all corners of the country entered the market orderly. A total of 1680 business households were settled on the same day, including four foreign trade franchised districts in 78 foreign trade companies. According to the data, since the trial operation in March 1st, many domestic and foreign buyers have come to the market every day. The daily traffic volume has reached more than 4000 passengers, with an average daily sales of nearly 30 million yuan. China Textile City's international fabric procurement center responsible person said that the official opening of the market has undoubtedly injected a strong heart for the optimization of the entire textile city. Next, on the basis of grasping the hard environment, we will further manage the soft environment and listen to the opinions and suggestions of the operators through irregular visits and convening a forum to promote the development of the market in the direction of internationalization, fashion, intelligence and high-end.

In March 13th, reporters saw a busy construction site at the clothing production Park of the southern Hunan Textile Industrial Base in Changning City. Since Changning City launched the "fighting for one hundred days, achieving double and over half" to strive for the first wave of excellence, the city has made solid preparations for the epidemic prevention and production of the southern Hunan Textile Industrial Base Project. At present, the site has been fully restored, and 6 assembly plant construction has entered the installation process of indoor decoration, fire protection facilities and ventilation pipes. It is expected to be completed and delivered at the end of June this year. It is reported that the South China textile industry base project is made up of clothing production Park and environmental protection facilities park. Recently, the cowboy town is built on the whole industrial chain of cowboy dress, and is extended to home textiles, cotton and hemp, textile and so on. It plans to build integrated research and development, design, theme culture, production, display, network platform, sales, export, logistics and so on with global influence and international competitiveness. Textile manufacturing and export base. The overall planning of the project is about 6 square kilometers, with a total investment of 10 billion yuan, 1 billion 500 million annual output of postpartum clothing, 100 billion yuan of annual output value and 30 billion yuan of annual export trade.

Wei Qiao textile (02698) announced its year-round performance as at the end of December last year, with a net profit of 218 million yuan (RMB). The same year), a year-on-year decrease of 66.1%, a basic profit of 0.18 yuan per share, a year-on-year decrease of about 66.7%, and a final dividend of 6.4 points. During the period, revenue was 15 billion 168 million yuan, down 7.8% year-on-year, gross margin was 961 million yuan, and fell by 44.1% on average.

In March 12, 2020, the United States Trade Representative Office (USTR) announced the tenth batch of 200 billion dollar products under the list of tariff products. A total of 5 10 tax number products were completely excluded, including 3923210030, 3923210095, 3926.20.9050, 4015.19.1010 and 5603.12.0090, of which 3 were textile and garment products tax numbers. The two tax numbers of 4015.19.1010 and 5603.12.0090 were partially excluded from the third batches and the eighth batches of the exclusion list. At the same time, the second batch of products exclude notices under the list of $300 billion plus tariff products was released. The first batch of 8 Tax numbers (5 of them were textile and garment tax numbers) were completely excluded. This time, excluding the new tax numbers 3926.90.9990, 6307.90.9889, 8479.89.6500 and 9004.90.0000, some of the excluded products were all medical related articles, including 1 textile and clothing products: 6 307.90.9889. The excluded products will no longer be subject to a 7.5% tariff when they export to the United States.

Global cotton inventories will be reduced by 1% to 18 million tons in 2019/20, which is the fifth consecutive quarterly decline. The International Cotton Advisory Committee (ICAC) said in its latest updated monthly report that the reduction in global cotton inventories was attributable to a 5.5% to 8 million 400 thousand tonnes reduction in China's cotton stocks. China is the only country expecting inventory to drop. It predicts that 3% of the rest of the world will grow to 9 million 600 thousand tons. At the same time, global cotton consumption is expected to remain stable, although the global cotton production estimate will grow by 1%, but the stock will be relatively reduced. Cotton is expected to surge by 12% to 6 million tons in India, and the world's largest exporter will grow from 9% to 4 million 400 thousand tons.

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