Can Cotton Staple Fiber Set Sail Again After Concussion

The cotton textile sector has been suppressed in recent years. It seems that there is not much good news in recent years due to the adverse impact of last year's epidemic situation and the trade friction of the previous year. However, these two contradictions have been alleviated to a certain extent this year. With cooperation replacing confrontation and gradual injection of new coronal vaccine, does the cotton textile sector still have investment opportunities after experiencing a wave?

01 the global economy recovers gradually and the downstream demand recovers slowly

In March of 20 years, China's textile export amount broke out rapidly and reached new highs for several years. One of the most important reasons is that the overseas demand for epidemic prevention products such as masks has increased greatly, while the proportion of textile materials such as cotton is not large. More noteworthy is the demand for clothing and accessories, which bottomed out in June last year and is recovering slowly. At present, it is close to the same period in previous years. Since China has already entered the post epidemic era, its follow-up power mainly comes from the recovery of other major European and American economies.

From the signs in Europe and the United States, there are indeed signs of recovery. Vietnam's textile export can be regarded as the leading indicator of EU economic recovery. From the current data, its textile export amount is also higher than that of the same period in previous years, while the U.S. retail and food services are regarded as the leading indicators of the U.S. economic recovery, and from the cumulative year-on-year data, it is also in a year-on-year growth of 5%. It can be seen that both indicators are improving, so I am optimistic about the recovery of major economies in the future.

02 domestic downstream consumption is strong and inventory remains low

Cotton downstream inventory, yarn and grey cloth inventory is also significantly lower than the same period in previous years. This low inventory level also proves that the housing industry downstream recovery is obvious, and with the arrival of seasonal peak season, the situation of tight downstream supply is expected to continue.

China's cotton reserves have been reduced to a lower level

The most important thing is that the national reserve cotton has decreased by about 1.67 million tons from 10 million in 2014-15 years, and the national storage of cotton has been exhausted. The important factors restricting the rapid rise of cotton have changed significantly.

On the whole, cotton is expected to present an upward pattern of shock.

As another cotton spinning variety in futures, staple fiber also deserves our attention.

Brief introduction of 04 staple fiber

Polyester fiber, namely polyester fiber, is the downstream product of PTA. It is the largest and most widely used chemical fiber, accounting for more than 80% of China's chemical fiber output.

Polyester fiber has the characteristics of high strength, good wear resistance, good light resistance and straightness, but compared with natural fiber, it has poor air permeability, hygroscopicity and dyeing property. Polyester is widely used in clothing, bedding, various decorative fabrics, special fabrics for national defense and military industry, as well as industrial fiber products such as filter materials, insulation materials, tire cord, conveyor belt, etc.

According to the length, polyester can be divided into staple fiber and filament. Polyester staple fiber is a kind of staple fiber similar to cotton in appearance. Its length is tens of millimeters. It can be made into cloth by spinning or non-woven process. The length of polyester filament can reach several thousand meters and can be directly used for weaving without spinning.

Polyester staple fiber (hereinafter referred to as staple fiber) is a kind of short fiber which is produced by polymerization of PTA and ethylene glycol. In the melt state, pet is spun, drawn and cut off. Since it entered China in the 1970s, due to its wide use and low price, the market scale has developed rapidly and has become an important raw material in textile, clothing, home textile and other industries.

The primary staple fiber is made from PTA and glycol through polymerization, spinning and cutting, commonly known as "chemical fiber". Recycled staple fiber is mainly made from recycled PET bottles after drying, melting, spinning and cutting, commonly known as "small chemical fiber".

05 staple fiber basis difference has been quickly repaired, and the safety margin has been improved

Staple fiber varieties have been maintaining a high premium since the listing, with a rise of about 600. In recent years, with the rapid strengthening of staple fiber spot, staple fiber basis difference has also been rapidly repaired, and at present, the premium is not much. The margin of safety has also been improved.

From the seasonal trend of staple fiber, staple fiber is easier to get out of the seasonal strong rising market in recent years from June to September. From March to may, the market tends to fluctuate, and the futures market in September deserves more attention.

06 staple fiber inventory level is low, it is still easy to rise but difficult to fall

Whether from the domestic PET staple fiber inventory days, or Jiangsu and Zhejiang loom inventory days, its inventory level has reached a new low over the years. In such a low inventory level, staple fiber fundamentals are still relatively strong. Generally, the pattern of easy rise and difficult fall will remain.

To sum up, the opportunity is to fall out, cotton, staple fiber after adjustment still has the opportunity.