In the past two months, textile people have been very troubled by the price of raw materials. With the conflict between Russia and Ukraine, international oil prices have skyrocketed, and downstream polyester factories have passively followed the rise. It was not until the Federal Reserve raised interest rates last month that the stock price rose. Only then was there some relief.
However, due to insufficient terminal demand, the price of upstream raw materials has increased, but the price of cloth sold at the terminal has not risen at all. When raw materials have fallen, cloth prices may also fall, and the transmission of raw material costs has obviously stagnated. In the end, textile enterprises The profits are getting lower and lower, and many times when placing orders, you are just “losing money and making money”, but this situation may change to a certain extent in the future.
China-U.S. tariffs may be lifted this week
On the morning of July 5, Beijing time, the finance ministers of China and the United States held a video meeting, and the Wall Street Journal also reported that It was said that the United States will cancel the additional tariffs on China within this week. Affected by this news, the A50 index surged over 1% during the session. Among them, textile stocks performed even more strongly. Textile and apparel stocks opened sharply higher. Leading stocks closed the market. Shengtai Group, Korrun, Taimus, Huafang, etc. all surged higher. .
In 2018 and2019, Sino-US trade friction is still the hottest topic in the textile market. Many textile manufacturers People also feel deeply about this. At that time, the editor also conducted some research on this issue in the market. A cloth boss said that as soon as the tariffs came out, some previously negotiated orders immediately turned into losses. The number of orders exported to the United States that year dropped by more than 30% and the profit dropped by nearly 50%.
Now the United States wants to eliminate tariffs mainly because of the high inflation rate (CPI). HighCPI is what the United States is facing. A major problem that has seriously affected the normal lives of ordinary people in the United States. And today, when various conflicts are erupting in the United States, high CPI will determine the upcoming midterm elections to a large extent. Therefore, in order to reduce CPI, the United States has taken many measures, and the previous interest rate increase is one of them.
Some organizations estimate that more than 70% of the additional tariffs will be borne by the US, which will actually have an impact on the USCPI There are about 0.9%. In addition, this policy was formulated by the previous US administration, so the current administration does not have much psychological burden to cancel it.
Possible impact if tariffs are lifted
In any case, the global financial market is now in a situation of excess hot money, and when capital has nowhere to go, it will speculate on everything that can be speculated, especially bulk commodities such as crude oil and ore. Favorite. For example, international oil prices fell just last month because of the Federal Reserve’s interest rate hike, and then rose again within a few days of falling.
However, this time the price of downstream polyester raw materials did not rise as much as before. Of course, it was not because the polyester factories did not want to rise, but because the cloth bosses really could not afford it. No one buys the fabrics produced, and there is no profit. We can only reduce the operating rate step by step, and polyester factories can only reduce production one after another.
Now that a good topic like the cancellation of tariffs imposed by China and the United States has come out, wouldn’t it be a disservice to overseas financial capital if they don’t speculate on it?
This time, polyester raw materials are likely to rise along with oil prices.
Of course, cloth bosses are not always averse to raw material price increases. As long as the final cloth can be sold, the upstream price increase can be effectively transmitted to the downstream. A small increase in raw material prices is actually beneficial to textile companies. Once the additional tariffs are lifted, a rebound in exports to the United States is foreseeable.
Of course, we cannot be blindly optimistic. Although the additional tariffs may be cancelled, in the end,The results haven’t come out yet, but even if they do, this will be a forced move by the United States. It can be seen from the previous Xinjiang cotton incident that the United States’ overall strategy against China is still to suppress China, so textile companies also need to remain cautiously optimistic about this.
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