Cotton prices are expected to rise in the future chemical fiber production capacity than expected

- Mar 08, 2019-

The reduction of tax on spinning enterprises plays an important role in cotton yarn price reduction

On March 5, the opening session of the second session of the 13th National People's Congress was held at the great hall of the people in Beijing. The government work report announced the implementation of a larger scale of tax cuts, reducing the current tax rate of 16 percent for manufacturing and other industries to 13 percent.Tax reduction and burden reduction have a positive impact on enterprise operation and profit, and may also play a role in lowering cotton and cotton yarn prices in the future.

Taking textile enterprises as an example, if the sales price of 1 ton of cotton yarn is about 24,000 yuan/ton, the tax-exclusive price of cotton yarn before the tax rate adjustment is 24,000 yuan /1.16=20690 yuan/ton, and the sales need to pay VAT is 20690*16%=3310 yuan/ton.

After the adjustment, assuming that the sales price of cotton yarn has not changed, the non-tax price of cotton yarn after the adjustment of tax rate is 24000/1.13=21239 yuan/ton, and the sales need to pay VAT is 21239*13%=2761 yuan/ton, with a difference of 549 yuan/ton.This to the enterprise, reduces the burden dynamics is not small.These are rough calculations, of course.

Cotton prices are expected to rise in the future

Market desocialization into the inventory phase of the future cotton prices are expected to rise.According to the USDA's new annual forecast, global cotton production is expected to rise 6.9 percent from this year to 27.5422 million tonnes, just 0.6 percent below the previous record high of 27.69942 million tonnes in 2011/12.Global cotton production is forecast to be higher than consumption in 209/20, resulting in an increase in ending stocks of about 217,700 tonnes.Cotton acreage and yield per unit area are expected to increase, resulting in a 6.8 per cent increase in total output.Global cotton consumption will continue to increase, but is expected to be slightly below the average growth rate in previous years.The continued pace of global cotton destocking is likely to be interrupted in 209/20.

Chemical aspects

Acrylonitrile prices gradually pull up

According to relevant statistics, up to now Shanghai secco acrylonitrile port price reference 12700 yuan/ton, east China port spot very few, businessmen offer reference 12800 yuan/ton nearby or even high price.

Polyamide fiber industry

In the Asia Pacific spinning nylon elastic fabrics, there is a very special fabrics - recycled fabrics.The general fabric price is about 15 yuan per meter, and this recycled fabric is more than 30 yuan per meter.This fabric has various functions such as moisture absorption and perspiration elimination, antibacterial, deodorization, and electrostatic absorption, etc. Currently, it is generally provided to adidas, Nike and other high-end brand customers.

PTA capacity forecast from 2019 to 2020

The new capacity of PTA in the next three years will reach 20.7 million tons.Production is expected to reach 6.5 million tons in 2019 and 13.2 million tons in 2020.

It is estimated that the nominal production capacity of PTA in China will reach 58.25 million tons in 2019. The actual production capacity of PTA in China is 43.4 million tons, and that of CR5 is 61.2%. The top five in the industry and the market share are respectively 23.2% of yisheng, 15.6% of hengli petrochemical, 10.6% of fuhai innovation, 6.4% of tongkun petrochemical and 5.5% of reignwood petrochemical.

It is estimated that the production capacity of PTA in China will reach 71.45 million tons in 2020, with CR5 accounting for 58%. The industry's top five and market share will be 23.5% of yisheng / 16.2% of hengli petrochemical / 8.6% of fuhai group / 5.2% of tongkun petrochemical / 4.5% of reignwood petrochemical. The number of manufacturers with production capacity of more than 1 million tons/year will further increase to 18.

As of September 2018, the existing nominal capacity of China's polyester silk industry is 36.34 million tons, with CR6 accounting for 51.7%. The top six in the industry and the market share of nominal capacity are respectively: tongkun 14.9%, hengyi 13.7%, xinfengming 9.1%, shenghong 5.2%, hengli 4.8% and rongsheng 4%.The market share of the top five polyester silk industry in the next three years is on the rise except for shenghong. The new capacity in the next three years almost comes from these industry leaders.In the next three years, the polyester silk industry will add a total of 770,000 tons of production.