The Textile And Clothing Industry Started Well After The Festival

When I was young, I liked to celebrate the New Year because I could wear new clothes and eat delicious food! I remember wearing new clothes bought during the Spring Festival on New Year's Eve, keeping watch, collecting lucky money, wearing beautiful new clothes and unwilling to sleep

With the development of social economy and the change of shopping methods, people can buy clothes they like whenever and wherever they see them. Therefore, the consumption concept of buying new clothes on festivals has been weakened.

"Have your children bought new clothes?" "No, they usually buy new clothes, and they don't wear new clothes for the New Year." "My family, too, doesn't buy new clothes specially." "I take my children to the mall to buy clothes. The children are only interested in playing and eating, and are not willing to choose clothes"... As the New Year approaches, parents have such conversations everywhere.

With the improvement of living standards, new clothes are no longer purchased on holidays, because you can go to all kinds of "shopping malls" at home and in the palm of your hand through the Internet, with more types of clothes than physical stores. With the rapid development of the Internet of Things era, shopping has already broken through the boundaries of regions, and the timeliness is also getting higher and higher. The sense of experience is getting better and better from static pictures to dynamic videos.

However, Ms. Han, a citizen of Zhengzhou, said that she still needs to buy a new dress for children to celebrate the New Year. For luck, Chinese folk customs and traditions, New Year clothes should be prepared. "The Year of the Dragon has a special meaning. This year I bought a Chinese style New Year clothes for my children - Hanfu. The price is not cheap, a set of more than 300 yuan." She said that when I was young, I didn't pay attention to new clothes, and I didn't have to choose them. As long as they were new clothes, I was very happy. Now there are many styles of clothes, and they basically follow the trend. Children will be happier if they choose what they like to wear.

"My family has no habit of buying clothes for the Spring Festival." Yang Sijia, a polyester researcher of Xinhu Futures, told the Futures Daily that in the past, when buying clothes, they paid more attention to style, but now they pay more attention to the comfort of fabrics.

The comfort of clothes is related to the fabric. There are many kinds of clothing fabrics, most commonly cotton and chemical fiber. Cotton, cotton yarn and PTA are both textile materials. PTA is mainly used to produce polyester fiber, which is the "polyester" we often see on the clothing label. Polyester accounts for a large proportion of raw materials in the textile industry, which can be divided into filament and staple fiber. The filament produces chemical fiber cloth, and the staple fiber is generally blended with cotton. Therefore, the price fluctuation of cotton, cotton yarn and PTA is closely related to the price of textiles and clothes.

Cotton and cotton yarn are easy to rise, but difficult to fall, PTA will rise first and then fall?

After the festival, how will the cotton, cotton yarn and PTA markets perform?

Wang Xiaobei, a cotton analyst at Hongye Futures, said that since the middle and late December 2023, downstream orders of domestic cotton have increased significantly. Yarn mills and cloth mills have changed from passive destocking to active destocking, and their enthusiasm for replenishing raw materials has increased significantly, which is also the main reason why Zheng Mian was stronger last December.

From the perspective of the downstream operating rate, the operating rate of the yarn mill stopped falling in the middle of December last year, and rose significantly in January 2024. In the same period, with the increase of the start-up rate, the inventory of finished products of the cotton mill declined rapidly, and the operation of the cotton textile industry chain entered a virtuous circle. Although the immediate theoretical processing profit of textile enterprises still suffered a large loss, the downstream saw signs of demand improvement. The market had increased confidence in the future market, replenished raw material inventory in succession, and cotton prices continued to rise. With the rise of cotton prices and the enhancement of market confidence, the hedging pressure level of ginning plants also rose further.

At the end of January, the central bank announced to cut the deposit reserve ratio by 0.5 percentage points on February 5; The IMF raised its forecast for global economic growth in 2024 to 3.1%, 0.2 percentage points higher than the forecast in October last year, releasing a signal of positive and stable growth, boosting market confidence and helping the economy to accelerate recovery. "From the macro perspective and the current order situation, the downstream demand for cotton after the festival will not be too bad. At the same time, with the rising price of Zheng Mian, the ginning plant's hedging pressure level will also move up. In addition to the expected decline in storage and cotton planting area, Zheng Mian and Zheng Sha will easily rise but not fall." Wang Xiaobei said.

In terms of PTA, Yang Sijia, a researcher of Xinhu Futures Polyester, said that from the perspective of the current PTA fundamentals, the supply was relatively sufficient from January to February, while the downstream polyester gradually entered the Spring Festival centralized maintenance period. However, due to the expected seasonal accumulation, plus the low inventory pressure of PTA itself, some enterprises concentrated in March for maintenance, and the performance of PTA2405 contract before the Spring Festival was not weak, The panel processing cost shall be appropriately restored to about 350 yuan/ton. From the perspective of demand, the terminal completed a round of replenishment before the festival, and the inventory of the polyester factory was transferred downward. At present, the inventory pressure of the polyester factory is low.

"After the festival, the polyester factory is expected to have a high enthusiasm for negative improvement after the festival when the pressure on the factory and warehouse is not great. The demand for PTA is expected to rise rapidly, and PTA itself also has maintenance, which is expected to usher in the departure from the warehouse. After the Spring Festival, the probability of price increase is high. However, as part of the pre holiday replenishment of the terminal has overdrawn the post holiday demand, the post holiday demand is expected to lack stamina, and the rise in raw material prices is likely to lead to negative feedback on the demand side, so the post holiday PTA2405 contract market trend is likely to rise first and then decline. " Yang Sijia said.

The textile and clothing industry will focus on three aspects in 2024

In 2023, China's textile and clothing market will be mixed, showing a pattern of "internal strength and external weakness". In 2024, it needs to focus on three directions:

First, can strong domestic consumption continue in 2023? In the long run, the fundamental reason for the restoration of the textile and clothing industry may lie in the policy support behind the demand data recovery. From January 7 to 8, 2024, the National Business Conference was held in Beijing. The conference emphasized the promotion of continuous expansion of consumption. It took the "Year of Consumption Promotion" as the main line, organized various consumption promotion activities, fostered and expanded new consumption, stabilized and expanded traditional consumption, and promoted the upgrading of service consumption quality. It is expected that with the support of various policies, the potential of terminal consumption in 2024 will be further explored and is in the process of continuous repair. In addition, from the perspective of cycle, the domestic market will enter the stage of overall replenishment in 2024. After July 2023, the decline of inventory in the textile clothing and apparel industry will narrow, and the cumulative year-on-year decline of the upstream textile industry will turn to increase, indicating that in the general environment of continuous improvement of demand, the industry views the sustainability of demand improvement and increases supply, As a result, the inventory turns to accumulation or the inventory decreases. The year 2024 is a turning point for the textile and clothing industry and the upstream chemical fiber industry from passive destocking to active replenishment. As a result of supply and demand, inventory performance can be inferred from the inventory performance that the industry will have greater confidence in the continuous improvement of demand in 2024, and will be more willing to supply.

Second, exports are expected to improve in 2024. Looking back at the performance of overseas markets in the early stage, the demand increase caused by monetary easing led to a large-scale replenishment of the market. However, due to the time difference, the completion of replenishment coincided with the interest rate increase cycle in Europe and the United States. The mismatch between supply and demand caused by demand decline and supply increase led to the high level of clothing inventory in Europe and the United States. Thus, from the fourth quarter of 2022 to the whole year of 2023, the industry focused on inventory digestion. Taking the US market as an example, there is still a certain distance between the inventory and the inventory sales ratio of the apparel industry today and the normal years. It will take about half a year to recover to a reasonable level under the benchmark scenario. It is expected that the demand brought by inventory changes in the first half of the year is relatively limited. However, at the macro level, inflation in the United States continued to decline and economic growth exceeded expectations. The economic recession did not come, and the probability of a soft landing of the economy further increased. The expected interest rate cut in the market has changed from three times to six times, and the time has moved forward from the middle of the year to about March. The unexpected change in monetary policy may provide impetus for the demand of the US market. In short, the adverse factors faced by exports are improving. It is expected that the decline of textile and clothing exports will continue to narrow in 2024, and even be expected to turn positive.

The third is the instability of the global geographical situation, which will be the focus of the textile and clothing industry, the upstream chemical fiber industry and even the entire bulk commodity market in 2024. From the perspective of industrial chain, the upstream raw materials are affected by the geographical situation, and the possibility of cost changes is greater. The textile and clothing industry is close to the terminal, and is more affected by demand. However, special attention should be paid to the fact that the spillover of geopolitical risks leads to a decline in the stability of the supply chain, or forms a new supply and demand mismatch, which is then transmitted to the price side. On the whole, according to the unexpected recovery of overseas orders before the market research festival, the market generally expects good demand in the first quarter of 2024, and the sustained recovery throughout the year is a relatively certain trend. However, during the recovery process, attention should also be paid to the impact of emergencies in the geographical situation.