Apparel / Textiles & Accessories

When it comes to bulk textile raw materials recently, everyone will think of "rising"!

Since July 20, the contract price of Zheng Mian CF2109 has risen from 16,380 yuan/ton to 17,270 yuan/ton, an increase of 5.43%. The average daily transaction price of reserve cotton rose from 16,652 yuan/ton to 17,008 yuan/ton, of which the daily transaction price of reserve Xinjiang cotton rose from 16,836 yuan/ton to 17,176 yuan/ton.

On the other hand, the price of PTA has also risen sharply recently. According to the latest research report of Wanlian Securities, on July 26, the PTA spot reference price was 5379.09 yuan/ton, compared with 4404 yuan/ton on April 1. Increased by 22.14%.

Not only the spot price, but PTA futures have also risen one after another recently. On July 27th, the PTA’s main early gains rose by more than 2% again, but the market was still worried about the shortage of circulation supplies under the approach of the typhoon, and the afternoon dive reduced the increase. As of the afternoon of the 27th, the main contract PTA2109 rose slightly by 0.30% to close at 5360 yuan. Since the beginning of this year, the main contract has risen by 42.41%.

So does the sharp rise in the futures spot of textile raw materials restrict textile companies' orders?

In terms of importance, supply is nothing but a rising lead, and demand is what determines the continuity of a later uptrend. As the price of raw materials has moved upward, the cost of textiles has continued to rise, but it is still in the off-season, and the prices of raw materials have risen frequently, and traders and downstream companies have complained. In the words of a person in the textile industry for many years, this situation has not been seen for many years.

Recently, some cotton spinning mills in Shandong, Henan, Xinjiang and other places have responded that the large increase in cotton has caused a significant decline in spinning profits from June, which in turn affected the orders received in the third and fourth quarters. According to statistics, the profit of 32 varieties of domestic cotton yarn was close to 2500 yuan/ton in March this year, and the profit level reached the highest point in the past ten years. With the rise in cotton prices in June and July, spinning profits have fallen to around 1,500 yuan/ton. Spinners in Changji, Shihezi and other places in Xinjiang reported that they have just received the first C40S order in September, and that the orders for the same period in previous years have been placed in mid-to-late October.

From the current domestic exports, the demand is stable and improving. According to the data released by the General Administration of Customs on July 13, China's textile and apparel exports maintained a steady growth in the first half of the year. In terms of RMB and US dollars, they increased by 3.3% and 11.9 respectively over the same period last year. %, but the burst of domestic orders last year did not appear, and the textile exports of neighboring Vietnam increased by 20% year-on-year. It can be seen that we are losing some of our advantages. Of course, if the demand is completely released, this little increase in Vietnam will not affect our demand side. What really affects the epidemic is the epidemic.

Looking at the epidemic as a whole, the United Kingdom, Indonesia, India, Iran, and Russia are the five countries with the largest number of new confirmed cases, and Indonesia, Russia, Brazil, Colombia, and Argentina are the five countries with the largest number of new deaths. The mutated virus makes it no longer safe for those who have been vaccinated. Simply put, this winter seems to be a difficult time period. The epidemic is at risk of spreading, so whether the demand can be released to the maximum extent needs to be questioned.

To put it simply, the rising pattern of bulk textile raw materials is still there, and the logic is relatively strong, but it is not invulnerable. The uncontrollable future demand caused by the epidemic has become the biggest uncertain factor, because, while bullish, risk control and prevention are required. Falling, after all, it’s not a fool who sits opposite to him and shorts his opponent. Once he has a chance, he will punch him hard.