Textile sales are slowly climbing, why do yarn prices continue to find the bottom?

In the past six months, I have become more motivated to buy masks than clothes. "I bought a few home clothes. "I only bought one pair of socks in the first half of the year. "I bought a bear bag in the first half of the year. "I didn't buy clothes, but I bought bedding." "I bought a few of them when I needed them recently." "In a special survey conducted by reporters, consumers generally stated that the consumption of clothing declined in the first half of the year, but the consumption of masks increased sharply, spending several thousand yuan per capita. In addition, the sales of bedding are also OK, after all, stay at home. , More time in bed.

　　 A report released by the China Textile Federation Industrial Economic Research Institute recently showed that since 2020, in the face of the new crown pneumonia epidemic, my country's textile industry has steadily promoted the resumption of work and production, and the production and supply capacity and the coordination of the industrial chain have returned to normal. In the second quarter, driven by the substantial increase in the sales of anti-epidemic assets and the slow recovery of the domestic demand market, the economic operation of the textile industry has risen under pressure. Although the main operating indicators from January to May are still in the negative growth range, the decline continues to narrow.

According to data from the National Bureau of Statistics, from January to May, the industrial added value of the textile industry above designated size decreased by 8.2% year-on-year, and the growth rate was 11.8 percentage points lower than the same period last year, but rose 3.1 percentage points from January to April this year, and increased in May. For the first time, the speed turns negative to positive. In all links of the industrial chain, the industrial textile industry maintained a high-speed lead. The industrial added value from January to May increased significantly by 50.7% year-on-year, which was 58.9 percentage points higher than the industry-wide growth rate. The apparel and home textile industries were affected by the shrinking terminal demand, and the industrial added value decreased by 12.8% and 10.6% respectively year-on-year. The industrial added value of the textile machinery industry from January to May decreased by 20.8% year-on-year, reflecting the sluggish investment confidence in the industry.

　　 Among the main categories of products, only the non-woven fabric output achieved a positive growth of 2.5% year-on-year, while the output of the remaining products decreased. From January to May, the output of chemical fiber, yarn, cloth and clothing of enterprises above designated size decreased by 3.2%, 18.1%, 27.6% and 17.9% year-on-year, respectively, and the growth rate was 16.2, 19.7, 27.4 and 17.5 percentage points lower than the same period last year.

　　 Entering the second quarter, my country's epidemic prevention and control situation continued to improve, residents' consumption activities increased, and domestic consumption of textiles and clothing recovered moderately. According to data from the National Bureau of Statistics, from January to May, the retail sales of clothing, shoes, hats, and knitting textiles of units above designated size dropped by 23.5% year-on-year, and the rate of decline was 5.5 percentage points higher than that from January to April this year. Online consumption continued to improve, and the national retail sales of online clothing products fell by 6.8% year-on-year, and the rate of decline narrowed by 5.2 percentage points from January to April.

　　According to data from the National Bureau of Statistics, from January to May 2020, the completion of fixed asset investment in the textile industry decreased by 30.5% year-on-year, and the growth rate was significantly slower than the same period last year by 30.9 percentage points. The investment scale of the entire industry chain is in a downward trend. The investment in the textile industry, chemical fiber industry and clothing industry from January to May decreased by 26.2%, 23.2% and 39.2% year-on-year respectively.

　　 Although demand is slowly recovering, many textile companies have recently reported that the prices of cotton yarn, polyester yarn and rayon yarn are still dominated by downturns. Especially in July, the market is even more worrying. The main manifestations are as follows:

　　 1. The pure cotton yarn has fallen to the bottom and there is still no sign of rebound. On the 14th, a person in charge of a spinning mill in Zhengzhou, Henan Province introduced that the prices of carded yarn 21S and 32S were RMB 17,500/ton and RMB 18,500/ton respectively. Since the beginning of June, the quotations of conventional yarns have fallen by 500-700 yuan/ton. After July, they continued to fall slowly and boiled frogs in warm water. I don't know when this situation will end. Combed yarn also shows a downward trend. Take the combed 40S as an example: on the 14th, a factory in Binzhou, Shandong Province quoted an ex-factory price of 21,900 yuan/ton, which was a cumulative drop of more than 2,100 yuan/ton from the high of 24,000 yuan/ton in March this year. Manufacturers said that since the beginning of this year, combed yarns have fallen off the cliff first, plummeting nearly 2,000 yuan/ton from mid-March to early May, and since mid-May, the decline has continued.

　　 2. Polyester yarn has been declining recently due to the influence of raw materials. According to feedback from some small and medium-sized yarn mills in Henan, Hebei and other places, as of mid-July, the mainstream price of pure polyester yarn T32S in the market was 9,600 yuan/ton, and the higher price was also below 10,000 yuan/ton; the mainstream price of T45S was 11,000 yuan/ton Nearby, the recent market is also dominated by declines. From the trend point of view, pure polyester yarn has been experiencing twists and turns since May. Take T32S as an example. From May to July, it rose first and then fell. The high point was around 10,000 yuan/ton, and the recent price was low.

　　 How to trend in the later period, the market has a high degree of attention, but everyone's confidence is generally insufficient. According to an industry insider, in 2020, pure polyester yarn has fallen by more than 2,000 yuan/ton, and everyone is eager to return to the level of the beginning of the year. Renmian yarn continued to dive down to find support. According to market feedback from various regions, since July, rayon yarn has been oscillating downward. As of July 14th, the price of R30S from a factory in Dongying, Shandong was 12,000 yuan/ton, which was 100 yuan/ton lower than last Friday (10th), and the price dropped by 2,300 yuan/ton compared with the beginning of March this year. Why does the yarn continue to bottom out recently? According to analysis, the main reasons are:

　　 First, the United States, India, Italy, Spain and other countries "re-block", making foreign trade orders even more difficult. Affected by the epidemic, many states in the United States have suspended their economic restart plans, Uttar Pradesh in India announced a re-blockade, Spain has returned to the state of lockdown, and Italy has extended the state of emergency... In addition, starting from July 9, the United States resumed additional levies on some exclusion lists 25% tariff. Therefore, the trade orders of domestic enterprises are even more terrible. They have no choice but to export to domestic sales and have to exchange sales at low prices.

　　 Second, the raw material market has always been difficult to restart, which objectively drags down yarn. According to traders and distributors in various places, as of mid-July, the quotation of the inland double 29" Xinjiang machine-picked cotton is 12,500 yuan/ton (pickup, official decision, with ticket), and the quotation of "Double 28" is around 12,300 yuan/ton. Compared with the previous week, the center of gravity dropped by around 100 yuan/ton. As of the 14th, the mainstream price of 1.4D*38mm direct-spun polyester staple fiber in Shandong, Hebei and other places was 5,400 yuan/ton, down 100 yuan/ton from the previous week. Tons, compared with the beginning of July, fell by 500 yuan/ton. At present, the mainstream price of viscose staple fiber is 8600 yuan/ton, which is also in a downward channel. Therefore, the raw material market is difficult to open, which objectively drags down the yarn market.

　　 Third, market pessimism spreads, and various entities dare not enter the market easily. In 2020, the global epidemic situation has not yet been controlled in some countries; international crude oil prices have plummeted, and there has been no significant improvement so far. The entire international situation is turbulent and unstable, and the "cash is king" mentality of various entities has brought numerous obstacles to economic recovery.

　　 To sum up, the process of yarn bottoming may continue, and the main players in the market should exercise caution and prepare for a major reshuffle of the industry.