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Zheng Cotton Rebound Is Not Sustainable &Nbsp; Policy Puzzles Are Not Changed In The Near Future.

2011/6/21 9:05:00 62

Judging from the trend of raw material inventory and finished goods inventory in the 51 textile enterprises we studied,

textile industry

The close relationship between PMI and industrial added value continues to exist. From the point of view of PMI, the period of "de Stocking" has not ended, and its subsequent impact on the economy and industry needs to be repeatedly observed and verified.

And the tight chain of funds before the end of June will undoubtedly exacerbate the urgency of inventory cleaning in the cotton textile industry chain.

Despite the limited space, the downside risk is still much larger than the trend inflection point.

In terms of macro policy, constrained by the high unemployment rate, the reduction of fiscal deficit and the cycle of presidential election, the US mid-term will be forced to maintain loose monetary policy.

US policy options, high domestic inflation expectations and change cycle will narrow the space for China's regulatory policy to operate from inside and outside.

From the perspective of industry, the impact of cotton industry chain in tightening policy is quite obvious.

Cotton at the end of the year

market

There are many definite factors. The above industrial environment is difficult to change. On the one hand, it is aimed at the macroeconomic regulation and control policy of inflation pressure. In May, CPI just announced that it rose by 5.5%. The state immediately raised the deposit reserve ratio and increased the survival difficulty of small and medium cotton and textile enterprises.

On the other hand, China's cotton purchasing and storage policy has locked the lowest price.

In addition, the cost of raw materials, labor, capital interest and the appreciation of RMB will continue.

Uncertain factors are climate, textile and clothing export environment, and learned from the China Cotton Association that the Ministry of Commerce may make use of textiles.

Export tax rebate

As a lever, we should adopt some policies to readjust the structure of cotton spinning industry.

These industrial environment will suppress Zheng cotton's rebound space.

In May, China's export volume continued to fall from the same period last year, from 29.9% to 19.4% compared with the same period last year. The textile export volume increased by 2% compared with the same period, and the growth rate dropped 18%.

The sharp fall in exports once again reflects the negative impact of the accelerated appreciation of the renminbi on foreign demand.

According to a survey in mid June, the downward trend of export volume, backlog and production volume of textile industry has not yet been reversed.

This makes us unoptimistic about the performance of cotton prices in the coming week.

After sorting out the various factors that affect the market, we notice a problem: at present, in the short term market judgement, such as Zhou's judgement, the current wavering policy is extremely destructive, and the changes in the endogenous driving force of economy and inflation have been reflected more clearly, and the rest is the exogenous influence on the economy and inflation after the policy is clear.

We judge that the situation of "policy confusion" will not change significantly in the short term, so the market will continue to explore the bottom line.

Despite the limited space, the downside risk is still much larger than the trend inflection point.