Recent economic slowdown prices of commodities and cotton-related markets both fell
In 2018, China's economy slowed down under the increasingly complex external environment. Looking around the world, the United States continues to launch trade protectionism, the multilateral trading system is facing challenges, the global economy is also facing the risk of deceleration. The IMF report in October lowered global economic growth expectations from 3.9% in April to 3.7% in 2018 and 2019, the same as in 2017. The authors point out that the world is still at a high level of growth, but the growth rate is at its peak, and the growth prospects of a range of major economies are slowing down, the financial situation is tightening or causing risks. Preferences suddenly reversed. Even the U.S. domestic economy is not immune. The three major U.S. stock indexes fell sharply on the 20th of this month, reversing the year's gains. Since the end of September, U.S. stock volatility has increased, mainly due to market concerns about Fed interest rate hikes, trade frictions and global economic slowdown. Some analysts believe that & ldquo; rolling bear market & rdquo; also comes from its domestic interest rate rise and no longer coordinated global economic expansion.
Recently, a series of economic data show that global demand is shrinking. Cotton, as a bulk agricultural product and textile raw material, is affected by both the global demand downturn and the decline in commodities. We can learn from the data.
1. The fall in commodity prices
New York Light Crude Oil Futures WTI's main contract hit a new low of $55.10 per barrel in the past year on March 13, and the low of $52.77 on the 20th. Crude oil, as the most important energy and raw material in the world, can be called commodity's & ldquo; leading & rdquo; and its price operation directly reflects global demand and economic trends. The sharp drop from the high in early October was directly attributable to oversupply and weakening demand. It was also related to the Federal Reserve's interest rate increase and the withdrawal of funds, reflecting the expectation that global economic growth would peak.
Since the end of September, the CRB index, which comprehensively reflects commodity futures prices, has continued to decline and reached its lowest level in more than a year on November 20. The CRB index, which tracks the price trend of 19 main commodity futures, is a better indicator of inflation and reflects the trend of economic development to a certain extent.
2. Textile downstream consumption signal
Cotton yarn price at home and abroad is the most direct signal reflecting the market demand of cotton downstream. Since 2018, cotton yarn price at home and abroad has gone through a process of peak drop, in which the external yarn price reached a peak in early July and began to fall, while the domestic yarn price has fallen from the end of August, and the current external yarn price has been lower than the domestic yarn price. From the data intuitive point of view, the fluctuation of external yarn is very obvious, the fluctuation range is much larger than that of domestic, but the price of external cotton did not fluctuate so dramatically in the same period, the high sensitivity to market demand or the main reason.
The new order index in PMI of China cotton textile industry reflects the new orders of cotton textile enterprises. Normally, the index declined significantly in the off-season and rose significantly in the peak season, as was the case last year. But this year's situation is slightly different, mainly in September and October, the peak season is obviously not strong, only in August, the performance is good, there are reasons for orders moving forward, the normal peak season is very poor, and has a direct relationship with Sino-US trade frictions.
3. Cotton Price Operation
Since 2018, cotton prices at home and abroad have experienced a process of first rising and then falling. The volatility of futures has obviously surpassed spot prices, and the fluctuation trend is more obvious. Since October, the domestic market has continued to decline. Among them, Zheng Mian has continued to decline, falling on the 20th day to a low of 14335 yuan/ton since September 2016, while the international market is basically stable.
