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The international cotton market continues to adjust at a high level, and there is a risk of continued turbulence!
Release date: [2021/6/11]  Read total of [440] times

This week, domestic cotton prices rose slightly, and international cotton prices rose slightly; domestic cotton yarns showed signs of rising again after a slight decline, and international cotton yarn prices continued to rise; polyester staple fiber prices stopped falling and rebounded.

1. Domestic cotton prices rose slightly

This week, the domestic cotton market was operating steadily, Xinjiang lint spot trading volume increased, and domestic cotton prices experienced a technical rebound after a period of decline. From May 30 to June 4, 2021, the average settlement price of the main cotton futures contract on the Zhengzhou Commodity Exchange was 15,631 yuan/ton, an increase of 19 yuan/ton or 0.1% from the previous week; representing the market price of standard-grade lint in the mainland The average price of the National Cotton Price Index B was 15,794 yuan/ton, an increase of 25 yuan/ton or 0.2% from the previous week.

2. International cotton prices rose slightly

This week, supported by the US$6 trillion stimulus package launched by the United States, the international cotton price showed a clear rebound after falling. From May 30 to June 4, 2021, the average settlement price of the main contract of ICE cotton futures (ICE) was 84.05 cents/lb, up 1.51 cents/lb from the previous week, or 1.8%; representing imported cotton China The international cotton index (M) average price of the main port CIF price is 93.42 cents/lb, an increase of 2.22 cents/lb from the previous week, or 2.4%, which is equivalent to RMB 15005/ton of import cost (calculated at 1% tariff, Including port miscellaneous goods and freight), an increase of 207 yuan/ton, or 1.4%, compared with the previous week, the international cotton price is 789 yuan/ton lower than the domestic cotton price, and the internal and external price gap narrowed by 182 yuan/ton compared with last week.

3. Domestic cotton yarn prices rose slightly after a slight drop, international cotton yarn prices continued to rise slightly

This week, the wait-and-see sentiment in the domestic cotton yarn market has become stronger. Large textile mills have relatively stable orders, and the prices of finished products are slightly higher. Small and medium-sized factories mainly sell at short-term profit orders. As cotton prices stop falling and rebound, the overall cotton yarn prices show up. A slight drop is another sign of price increases; after India, the epidemic in Vietnam once again fermented, and the textile production and delivery in Southeast Asia were further restricted, supporting the continuous upward adjustment of outer yarn quotations; the current conventional outer yarn price is higher than domestic yarn by 217 yuan/ton. The downstream grey cloth market is generally stable. Conventional grey cloths are mainly small and medium-sized orders. The price competition of some varieties is fierce, orders are difficult to receive, and the overall profit margin is average.

4. Outlook

The employment situation in the United States has improved, the Fed’s loose policy is still difficult to change in the short term, the epidemic has intensified the divergence of the industrial chains of various countries, and international cotton prices continue to adjust. In May, the number of private jobs in the United States increased by 978,000, the largest increase in 11 months, indicating that the job market is improving and the US dollar index is rising rapidly, but the Fed has not issued a signal for tightening action, and market doubts and concerns remain Warm up. In the international cotton market, the U.S. cotton planting progress is accelerating. As of May 30, the U.S. cotton planting progress was 64%, the same as the same period last year.

The southwestern monsoon in India is coming this week. Judging from the fact that the sales of cotton seeds in India have not declined, the epidemic has no impact on the epidemic sowing; the current operation rate of the clothing export distribution center in New Delhi, India has dropped to 40-50%, and about 20% of orders have been delayed or transferred Bangladesh, Sri Lanka and other countries; after India, the spread of the epidemic in Vietnam has severely blocked the supply chain of the textile industry. Terminal consumption in the United States and Europe is constantly repairing. In the week of May 22, Red Book commercial retail sales rose slightly to 13.6% year-on-year. In May, the Eurozone consumer confidence index narrowed to -5.1, the previous value -8.1.

To sum up, the global epidemic situation is volatile, the activity of the cotton industry chain in various countries is still highly differentiated, the United States continues to ignore inflation and continues to increase liquidity supply, the international cotton market continues to adjust at a high level, and there is a risk of continued turbulence.

The economy shows strong production and weak demand, and cotton prices lack the impetus to rise sharply. The impact of the increase in raw material prices in May has been reflected. The performance of the production side is stronger than the demand side, and the performance of enterprises of different sizes is different. According to the National Bureau of Statistics, the PMI production index in May was 52.7%, which was 0.5 percentage points higher than the previous month. The new order index was 51.3%, 0.7 percentage points lower than last month, the PMI of large and medium-sized enterprises was 51.8% and 51.1%, respectively, 0.1 and 0.8 percentage points higher than last month, and the PMI of small enterprises was 48.8%, lower than 2.0 last month. Percentage points, down to the contraction range.

In the domestic cotton market, after the cotton planting in southern Xinjiang, cotton seedlings grow about a week later than in previous years. With the recent rise in temperature, some cotton has budded. The later weather changes are critical to new cotton production; the spot market is still abundant. , Imported cotton stocks continue to increase. The market predicts that the current domestic imported cotton stocks have risen to more than 750,000 tons. This week, the total cotton stocks in Zhangjiagang area continued to rise to 92,000 tons, an increase of 2.2% compared with last week.

Cotton enterprises may increase their willingness to reduce inventories. At present, textile factories above the designated size receive orders and arrange orders normally, and spinning profits are still high. At the same time, as the epidemic situation in Vietnam and other countries worsen, the return of orders to the country is expected to increase. Recently, terminal purchases of downstream weaving, fabrics and clothing have slowed down. The epidemic has caused the suspension of the Guangzhou clothing wholesale market, which has affected market activity. In the short term, the inventory of cotton yarn and grey cloth in coastal areas may increase.

To sum up, the domestic cotton supply is relatively abundant, and the downstream industry chain is "unevenly cold and warm," but the market is still bullish. Given that the country has repeatedly proposed to ensure the supply of bulk commodities and stabilize prices, and sufficient macro-control policies Tools to solve prominent problems in economic operations such as the rise in commodity prices, and the actual driving force for a sharp rise in domestic cotton prices has weakened.