On the afternoon of Sunday (March 15) local time in the United States, the Federal Reserve suddenly announced a cut in interest rates to close to zero and launched a $700 billion stimulus package. A massive quantitative easing program to combat the impact of the coronavirus on the U.S. economy while stabilizing the stock market.
Before the U.S. stock market opened on March 16, U.S. President Trump sent a tweet with the content “God Bless the USA”.
But the general trend of the economy will not be caused by the Federal Reserve However, God did not bless the United States as President Trump expected. The U.S. stock market plummeted at the opening and triggered the circuit breaker mechanism.
As of the close of the day, the three major U.S. stock indexes collectively hit the largest single-day decline in history, and the declines were all more than 10%: the Dow Jones index plummeted by nearly 3,000 points (2997.10 points), a drop of 12.93 %, reported at 20188.52 points; the S&P 500 Index plummeted 324.89 points, or 11.98%, to 2386.13 points; the Nasdaq Composite Index plummeted 970.28 points, or 12.32%, to 6904.59 points.
International oil prices also fell sharply again, with WTI crude oil falling below $30 per barrel and Brent crude oil falling more than 10% during the session. As of the close, WTI April crude oil futures closed down $3.03, or 9.55%, to $28.70 per barrel. Brent crude oil futures for May delivery closed down $3.80, or 11.23%, to $30.05 per barrel.
Under the influence of global stock market futures and crude oil, On March 17, polyester product prices also began to fall.
PTA, as of the closing at 15:00 on March 17, the main PTA futures 2005 contract closed at 3682 points, down 110 points or 2.9% from the previous trading day.
Ethylene glycol, as of March 17 At 15:00, the main 2005 contract of ethylene glycol futures closed at 3838 points, down 107 points or 2.71% from the previous trading day.
In terms of polyester filament, a major mainstream factory in Tongxiang dropped by 100 yuan/ton, and a factory in Xiaoshan dropped by 100 yuan/ton. The price can be discounted by 200 yuan depending on the volume. Products of various specifications fell by 100-200 yuan/ton.
We found that although polyester raw materials are falling, the decline seems to be significantly lower than crude oil and the stock market. Is it because the fundamentals of polyester raw materials are better? On the contrary, this further illustrates that polyester raw materials have gradually reached a point where they can no longer fall.
Stock market crash + epidemic raging, economic crisis coming?
The United States has always had a lot of hidden dangers in macroeconomics. In 2018, when the U.S. economy began to turn from prosperity to decline, Trump A series of methods of drinking poison to quench thirst were used to forcefully stimulate the economy and drive up U.S. stocks. Although U.S. stocks rose in the end, the “thunder” had already been laid.
Recently, with the global outbreak of the new coronavirus, a price war has begun among crude oil producing countries, and the world economic situation has taken a turn for the worse.
At this time, the European Union, the world’s largest economy, and the only superpower, the United States, are both “suffering” from the epidemic. The stock market bubble has been burst, even if the Federal Reserve Interest rates have been lowered to zero, but this still cannot prevent the stock market from recording its largest one-day decline in history.
The economic situation was not good originally, and there was an epidemic again Keep wreaking havoc. “There are pursuers in front and interceptors in the back.” Under the current situation, what everyone needs to think about now is whether the economic crisis is coming again?
Foreign trade is cold, and the situation is worse than last year More severe!
For textile companies, the subsequent weakness of the market is almost foreseeable.
Against the backdrop of Sino-US trade frictions, my country’s exports of textile yarns, fabrics and products from January to December 2019 were US$120.1992 billion, and exports of clothing and clothing Attachment 151.3676 billion US dollars%, totaling 271.5 billion US dollars.
However, the recent epidemic has been raging, and major textile export destinations such as Europe, the United States, Japan, and South Korea have suffered a major blow; although ASEAN has become China’s second largest textile exporter In this area, the impact of the epidemic will not be significant for the time being, but because it is mainly engaged in processing work in the textile chain, it will eventually be exported.The markets are still Europe, the United States, Japan and South Korea, so the impact will not be small.
Last year, the textile industry experienced a rare “cold winter” due to overcapacity caused by the transfer of water-jet looms. However, this year, as the foreign trade situation has further deteriorated, textile companies will have to The situation we face may be more severe than last year.
It is a crisis, but it is also rare Opportunities
There is actually no lack of opportunities behind the crisis, especially for the Chinese textile industry.
From the perspective of the overall environment, every economic crisis is a reshuffle of the international situation, and this financial crisis is mixed with the new crown epidemic, causing destructive power Even more huge.
Among the world’s major countries, China has the best control over the COVID-19 epidemic and its economic development is relatively healthier, so it is subject to less fluctuations. I believe that after this storm passes, China’s international status will be further improved.
This is also true from a micro perspective. China has always been in a midstream position in the textile industry chain, and the textiles it produces are also known for their high quality and low price. . Although the annual export volume is huge, there has always been a large gap with developed countries in Europe and the United States in terms of brand, fashion, and design, which have the highest added value of products.
These gaps are on the one hand due to the short development time of the domestic fashion industry, and on the other hand they are also a reflection of international discourse power.
The dual crises brought about by the financial crisis and the epidemic are not an opportunity for China’s textile industry to overtake others.
Stay alive! Only then can we have a future!
History has proved that after every major crisis, there will be huge demand in the market, and there will be a period of economic take-off. After World War II, This was also the case after the 2008 economic crisis, and I believe this time will be no exception.
For textile companies, the coming days will indeed not be easy. While foreign trade is blocked, a large number of textile foreign trade companies have turned their heads to the domestic trade market. The domestic trade market cannot digest such a large production capacity, and the overcapacity situation may be more serious than last year, posing great challenges to the cash flow, technology, and business strategies of textile companies.
But on the other hand, as long as they can survive this downturn, when the global economy recovers and huge market demand breaks out, textile companies will There will be a golden time for development!
The road is tortuous, but the future is bright. I hope that all textile people can survive! Accumulate strength and wait until the storm passes to soar into the sky!
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