Cotton processing

The cost base of high cotton prices is analyzed.

Second, the replacement of polyester staple fiber to cotton will drive the price of polyester staple fiber to a new high.

More importantly, we see that after 2009, the growth of polyester staple fiber capacity is almost zero growth. This is the result of the last round of the industry downturn. It also constitutes an important reason for this round of industry rebound. We maintain the industry's "recommended" investment rating.

Chemical fiber industry

The three stage of investment theory: in the first stage, cotton prices began to rise, cotton production and seed enterprises took the lead in profits; in the second stage, cotton rose, polyester staple and viscose staple fibers were directly replaced by cotton, the demand increased, and the price difference of polyester staple fibers increased; however, the short staple of viscose staple fiber rose and did not lose to cotton, and the spread of price difference was limited. In the third stage, the cotton industry rose sharply and the whole industry of chemical fiber benefited.

At present, cotton prices are still in the second stage, and we still push the polyester staple industry.

Cotton price

The cost side has solid support: the formula for calculating cotton cost in the industry is cotton price = (purchase seed cotton cost - cottonseed cost) *2.7 processing fee (about 500 yuan / ton).

At present, the average price of seed cotton purchase in the market is 10600 yuan / ton, and cottonseed price is 3600 yuan / ton, thus calculating cotton processing cost is 19238 yuan / ton, and cotton price has solid cost support.