According to the cotton outlook data, the commercial inventory of cotton was 4.624 million tons by the end of December, an increase of 939,300 tons from the previous month and a decrease of 935,800 tons from the same period last year. Commercial inventory of cotton has been at the lowest point in nearly five years for three consecutive months. Mainly due to the influence of the external environment, the cotton processing progress is slow, which makes the cotton commercial inventory increase slightly, and the overall level is at a historically low level, but the supply in 2022 is sufficient. In the downstream market, as of the end of December, the inventory of cotton industry was 551,200 tons, an increase of 66,300 tons from the previous month. The inventory of cotton industry continued to rise, mainly due to the pre-holiday stocking of enterprises before the Spring Festival. As of the end of December, the yarn inventory was 17.48 days, a decrease of 16.54 days from the previous month; The inventory of grey cloth was 33.53 days, a decrease of 5.55 days from the previous month. Judging from the inventory of finished products, the inventory of cotton yarn and grey cloth declined obviously this month. In December, the downstream market warmed up, the textile enterprises were in good condition, and traders also made a lot of purchases.

Twisting is to make the two sections of the sliver rotate relatively, at this time, the fibers in the sliver that were originally parallel to the yarn axis are inclined into a helix. For short fibers, twisting is mainly to improve the strength of the yarn. The twisting of filament can not only improve the strength of yarn, but also produce some effects. The amount of yarn twist and the matching of yarn twist direction and twist in fabric have great influence on the appearance and performance of products.

For polyester factories, the pressure on the cost side still exists, and the possibility of rising crude oil still exists. Investment institutions represented by Goldman Sachs bet that Asian economies will completely lift the COVID-19 restrictions and stimulate demand. It is noteworthy that while the demand is rising, the global oil supply is facing a reduction. It also means that the global oil supply will be tense in 2023. This also makes many market institutions optimistic about the international oil price this year. At present, due to the reality of low inventory, most polyester factories are still waiting for stability, but some factories have room for negotiation. Therefore, in the short term, in this final charge, polyester prices are still expected to give preferential treatment, but after the start of the year, there will be great expectations for a "good start" market.

On January 9th, the central parity of RMB against the US dollar was reported at 6.8265, the highest since August 22nd, 2022, with an increase of 647 basis points, the largest increase since December 2nd, 2022. Both onshore and offshore RMB rose above 6.8. Since the beginning of this year, the spot exchange rate of RMB against the US dollar has appreciated by more than 2%, and the offshore RMB against the US dollar has appreciated by 1.7%. With the appreciation of the RMB, we have confidence in the future of China, and more capital will be invested in China to promote a virtuous circle of the economy. Only then will everyone take out their savings for consumption, and the market demand will pick up.

Towards the end of the year, there will be a wave of Spring Festival travel rush workers returning to their hometowns, especially in the textile industry this year, which is really expected. First of all, the textile industry will have a long rest time during the Spring Festival. Most of the workers in the textile industry are migrant workers from all over the country. Because of the need of textile production, they usually have very little rest and vacation, so they will stay in their hometown during the rare Spring Festival. This also has an impact on the production time of the textile industry. Generally, the rest time of the textile industry during the Spring Festival is about one month. This is only the rest time. If we add the time for cleaning, refurbishing and recruiting factory machines, the textile industry will stop production for more than a month. Before the Spring Festival, the operating rate has been difficult to improve, and the turning point of the market still needs to be observed. From the present stage, although the weaving market has ushered in a favorable post-epidemic era, and confidence has been boosted, we can't ignore that it is difficult to improve the operating rate of enterprises in the short term, and the probability of "retaliatory" consumption in terminals is not high. Holiday enterprises have no time to pay attention to the trend of raw materials for the time being, and only care about when employees can return to work in Yangkang to deliver the previous orders. Many textile manufacturers with missing orders will choose to take an early holiday for the New Year to adjust their state and fight again next year! The Year of the Tiger is coming to an end, and the situation of textile enterprises is a bit embarrassing. As for when the market will take a fundamental turning point, further observation is needed in the coming year.

First, will the economy be good next year? Recently, in the 16,000-word report of the investment bank Goldman Sachs, it is estimated that the global economic growth rate will be only 1.8% in 2023, and the United States will barely avoid recession, while Europe and Britain will fall into recession. China's GDP growth rate will accelerate from 3.0% this year to 4.5% next year. It is predicted that the growth rate in the first half of the year will be significantly lower than the market expectation, and that in the second half of the year will be significantly higher than the market expectation. The World Trade Organization (WTO) predicts that the global merchandise trade volume will only increase by 3.5% in 2022, and will further decrease to 1.0% in 2023. This year is really not easy. The epidemic situation is repeated, the supply chain is affected, and the emergence of the black swan of the Russian-Ukrainian conflict has even affected the global economy. What's more, the U.S. Federal Reserve keeps raising interest rates to cope with inflation, resulting in a decrease in U.S. demand and a slowdown in investment, which also affects our foreign trade and exports to some extent. Second, what should we do? The focus of our foreign trade can be ASEAN and the belt and road initiative countries. Especially in 2023, which is the second year of RCEP (Regional Comprehensive Economic Partnership Agreement), we can make good use of this agreement. According to the report of the General Administration of Customs, we can see that more and more enterprises enjoy the benefits brought by RCEP (Regional Comprehensive Economic Partnership Agreement). At the same time, foreign trade enterprises can consider the global localization of supply chain, and actively participate in the domestic economic cycle, and there are many opportunities. In this way, we can reduce the influence of geopolitical and economic turmoil, make enterprises more flexible, and enhance their anti-vulnerability ability. Perhaps, we will still feel that the export is not as prosperous as before, but after the epidemic has passed its peak and the country has opened wider, especially after the conference in March next year, I believe that more import and export factors conducive to the economy and foreign trade will come out, and I believe that in 2023, China's import and export trade will rebound in a beautiful U-shaped way.

The latest barometer of trade in goods released by the World Trade Organization (WTO) shows that as the global economy continues to be impacted, the global demand for trade in goods is cooling down, and the growth rate of trade in goods may further slow down at the end of 2022 and 2023. In fact, the gloom of the global economic slowdown has enveloped the textile and garment industry in Asia. According to the latest data released by Vietnam, Bangladesh, Pakistan and other big textile and garment countries, the export situation of textile and garment industries in various countries is grim, and all of them show different degrees of export decline!

After four consecutive days of sharp rise last week, the RMB exchange rate rose again. On December 5th, the exchange rate of offshore RMB against the US dollar continuously rose through the 7.0 and 6.95 marks, with an intraday increase of over 700 points, the highest since the end of November. On the same day, the onshore RMB also rose sharply. The offshore and onshore RMB exchange rates against the US dollar were reported at 6.9504 and 6.9565 respectively. There are two main reasons for RMB's rise above 7: First, the recent favorable domestic policies have greatly enhanced the market's confidence in China's economic recovery, which has played a very good supporting role in strengthening the RMB; Second, under the expectation that the Federal Reserve will slow down the interest rate hike, the US dollar may enter a downward channel, and the corresponding RMB will appreciate. However, the real strength of the RMB exchange rate may have to wait until next year when China's economic recovery is highlighted and the Fed's interest rate hike cycle is confirmed to be over.