Cotton yarn and polyester prices determine when market demand will resume

With the development of the epidemic in Europe and the United States, export spinning mills began to turn to the already crowded domestic market, resulting in a relatively fierce short-term price war. However, the positive point is that the current inventory of spinning mills is relatively normal. This is related to the trade dispute that lasted for nearly two years. Large-scale spinning mills have better inventory control. However, if the order is delayed in recovering, there will be a loss of liquidity for the company Greater pressure. At the end of February, my country’s commercial inventory was 4,972,600 tons, slightly higher than the same period last year, but the destocking efforts were insufficient; industrial inventory was lower than the level of the same period last year; as of March 31, Zhengzhou’s warehouse receipts were forecasted to nearly 1.66 million tons, and the market supply was sufficient.　　 In the case of relatively stable supply, when demand recovers is the key to determining the market. From the data point of view, the epidemic situation in Europe and the United States is in a period of rapid growth. Although major countries are in a closed state, the probability of the epidemic continuing to spread has dropped significantly. However, considering the differences in social ideology, the epidemic situation abroad is expected to return to normal from May to July. From May to June, taking into account financial and policy factors, the bottom of the bulk commodity will not be ruled out earlier than this time. This is clearly reflected in the monthly price difference of Brent crude oil.　　The price impact between the chemical fiber industry and cotton is relatively large. It is expected that the expansion of the entire polyester production capacity and TA production capacity in 2020 and 2021 will be relatively large in terms of plan and actual landing volume. Up to now, polyester production capacity is 58.18 million tons, TA production capacity is 58.22 million tons, and TA production capacity will continue to grow on a large scale in the next two years. Under the premise of limited growth in overall fiber consumption, the substantial expansion of polyester production capacity will have a squeezing effect on the consumption of alternative cotton, which will affect the operation of the market in the next two years. At present, the price ratio of cotton yarn and polyester is at a historical high, and the inventory of polyester filament is also at a historical high. As of last weekend, the entire filament inventory is 110 days, which is higher than the previous high of 103 days in 2013 and 2014. The same filament processing profit It has also fallen to the lowest point since 2016, and short-term inventory pressure is relatively high, but the advantage is that the staple fiber inventory is relatively stable.　　 New cotton planting. The three-year target subsidy policy has been introduced, and the target price of 18,600 yuan/ton will provide good support for stabilizing the cotton planting area in Xinjiang. However, considering that the contract price of Zheng Mian in September is less than 11,000 yuan/ton, it means that the national government needs to spend about 38 billion yuan. In theory, for every 1,000 yuan/ton increase in the price, fiscal expenditure will be reduced by 5 billion yuan.　　Policy. Last week, the Standing Committee of the Political Bureau of the Central Committee mentioned that the adjustment and implementation of macroeconomic policies should be strengthened. At present, the United States has implemented a record-breaking stimulus policy, and Europe has also taken similar actions. Japan has also recently submitted a proposal on issuing interest-free loan subsidies. The overall stimulus is still dominated by monetary policy.　　 Off-market funds. The main forces of current market transactions include: basis traders and speculative funds. Calculated data shows that speculative funds have a certain amount of floating loss, but there are still more funds outside the market that have not yet entered the market. Basis traders are the passive receivers of prices, while speculative funds are the dominant players in market launches.　　In summary, the current market demand is not ideal. It may take 3 months or more for orders to gradually recover. The current market trend is more emotional. With the convening of the two sessions of our country, the government's supporting policies for enterprises have been promulgated one after another, and prices will be greatly improved after the market stocking demand resumes. Article Keywords: 　Cotton Yarn Polyester