First, cotton raw materials and all kinds of yarn line rose

February coincides with the Spring Festival holiday, the end of the replenishment demand has slowed down before the holiday, the industry generally cautiously optimistic about the post-holiday market, and dare not stock up, mainly to meet short-term order demand. From the above table can be seen, in February before the holiday period in addition to viscose staple fiber and cotton yarn products rose higher than the rest of the raw materials and yarn products compared to January, the price increase is small, the basic change is not significant. After the Spring Festival, all kinds of raw materials and yarn market has turned sharply upward, by the impact of rising commodities, led by polyester staple fiber textile raw materials rose sharply, polyester staple fiber after the holiday average price of 7541 yuan / ton, compared with the average price in January rose 21.92%. Viscose staple fiber is a continuation of the strong since February, the average price after the festival exceeded 15,000 yuan / ton, compared with the average price in January rose 21.08%. The raw material end of the surge also drove the downstream yarn, cotton yarn and polyester yarn also rose by more than 10%. During the Spring Festival, foreign cotton continued to record high to the domestic cotton market has brought upward momentum, after the festival cotton spot exceeded 16,000 yuan / ton, hitting a new high of nearly two years. Downstream cotton yarn market by the rise in raw materials and demand-side improvement, after the year rose even more than cotton, the spot market was once a confusing offer order to cancel the phenomenon.

Compared with last year, only polyester staple fiber and polyester yarn prices at the beginning of the year is less than the same period last year, the rebound began in the third quarter of last year, up significantly weaker than cotton and viscose varieties, polyester products still have some room to make up. Viscose staple fiber since the rebound in mid-December last year, the price momentum has been fierce, has continued to this day. From the cotton viscose spread can also be seen, from last year's long-term maintenance of 4,000 yuan / ton, approaching the current 1,000 yuan / ton or so, obviously up too much, is expected to viscose short-term rise will be limited, waiting for the cotton viscose spread back to a reasonable range. Cotton prices as a whole is still in a stable upward trajectory, from the historical price of cotton is still at a low level. Recently, the USDA in a significant upward revision of the 2021/22 global cotton consumption, total production and at the same time a significant downward revision of global cotton ending stocks, and focus on China, India and other large textile countries cotton demand. Overall, cotton prices still have room to rise.

Second, the operation of the cotton textile industry

From the viewpoint of China yarn inventory published by relevant agencies, yarn inventory decreased significantly from the end of 2020, and the enthusiasm of replenishment at the end of the year was evident. yarn inventory even dropped to about 6 days at the beginning of 2021, which was much lower than the level of the same period in previous years. According to a survey by China Yarn Network, a large amount of yarn was transferred from producers to market intermediaries in this round of replenishment. With the year-end approaching, yarn stocks rose slightly and lasted until the end of February. It can be seen that the post-year trading market is not as euphoric as the market performance. With reference to the production load, it can also be seen that since the resumption of the Spring Festival, the production load has picked up rapidly and is on par with 16 and 19 years, but significantly lower than 17 years. From the point of view of inventory and production this year, the market after the holidays compared with previous years is not special, and raw materials "rare in a decade" compared to the market is very light.

In terms of product inventories, cotton yarn was the best performer, with only 6.4 days of inventory at the end of February, significantly lower than the same period in previous years. Cotton yarn inventories were 11.5 days old and have been declining since December 2020, indicating strong downstream demand and giving impetus to this round of significant price increases for viscose raw materials and yarns. Pure polyester yarn inventory at the end of February 13.3 days, significantly higher than the level of the same period in previous years, and from the inventory changes are not optimistic. pure polyester yarn inventory at the beginning of 2021 was 5.5 days, slightly lower than previous years, and then the inventory level rose all the way, even in the post-holiday polyester staple fiber and polyester yarn prices rose sharply, the inventory level is still climbing. Downstream acceptance of polyester products is significantly weaker than viscose, so in the short term, polyester staple fiber and polyester yarn prices will face adjustment.

Since 2021, the stock of grey fabric has been fluctuating smoothly, with a slight decrease overall. Among them, cotton blank fabric inventory 19.8 days, a slight decline compared with the previous period, cotton blank fabric driven by the rise in cotton yarn prices, prices are in the replenishment stage, from the inventory changes in demand has improved. Cotton blank fabric inventory 20 days, compared with previous years at an average level, the overall inventory change in February is not much, from the demand side is not as strong as cotton yarn, the face of the rapid rise in raw material prices, downstream manufacturers are mostly wait-and-see.

Third, a number of factors to drive the textile market rose

From the macro level, China's GDP in 2020 to maintain a positive growth of 2.3%, the national economy as a whole is running smoothly, in the case of the national epidemic is effectively controlled, the public has full confidence in the full economic recovery in 2021. With the gradual spread of vaccines in Europe and the United States and other countries, the development of the global epidemic has been greatly contained, with the number of new cases steadily declining in the last month and hitting the lowest level in the last six months during the Chinese New Year. After taking office, U.S. President Joe Biden issued seventeen executive orders and said the top priority was to control the epidemic, followed by a $1.9 trillion economic bailout plan, which also brought inflationary expectations to the global commodity market. The immediate impact was to cause a rapid rise in crude oil, chemicals, and crops.

The textile industry was hit hard by the contraction of domestic and foreign consumption in 2020, and recovery expectations began to sprout from the end of the year. 2021 Spring Festival, the country advocates in situ New Year, in order to reduce the pressure of epidemic prevention and control, companies around the world have responded by introducing measures to encourage employees to spend the New Year in situ. This to a certain extent alleviates the pressure of the lack of troops when textile enterprises catch up with orders, from the feedback of most enterprises to see the rate of return to work after the Spring Festival this year has increased compared to previous years. Enterprise production rhythm accelerated coincided with the rise in raw material prices, enterprise shipments and the willingness to purchase will be stronger, the circulation of goods on the market to further support product prices. Since then, raw materials and product prices continue to rise more out of the industry's positive expectations and global inflationary expectations, has been out of the industry's fundamentals, into an irrational rise. From the recent actual transactions in the textile market, the downstream for the price of acceptance is limited, spinning enterprises also face a dilemma when taking orders.

Recently, commodities have begun to pull back, including polyester staple fiber futures out of six consecutive negative, cotton futures prices fell below 16,000 yuan / ton. As raw material prices fall, wait-and-see funds are expected to enter the field at a low level, textile enterprises orders are generally better, some companies said the first half of the work schedule has been scheduled. From a full-year perspective, the textile and apparel industry in the rebound period, end consumption growth is expected to be strong, raw materials and spinning and weaving industry long-term overall tend to be good. However, in the market rapid and sharp rise and social capital too much involved in the futures market, the entity still need to be alert to the market short-term risks.