Downstream Consumption Weak Cotton Prices Difficult To Warm Up

Since April, despite the global Cotton market The supply and demand situation has not been improved, but at home and abroad Cotton price The price of cotton in the main contract of ICE has dropped to 155 cents / pound from the 195 cents / pound. The cotton price center of zhengmian main contract has been shifted from 30000 yuan / ton to 26500 yuan / ton, and the cotton price in the domestic spot market has shifted from 30000 yuan / ton to 26500 yuan / ton. Downstream demand is hard to recover, and the new cotton market in the southern hemisphere is the main reason for the recent fall in cotton prices.

At present, downstream enterprises are still in the stage of de stocking, and are expected to continue to May or even longer. As the Central Bank of China continues to increase lending rates and raise the deposit reserve ratio, the loan processing cotton processing enterprises, Trade The cost of capital of enterprises and textile enterprises has increased significantly. Under the pressure of funds, most textile enterprises have recently made price promotions, changing their prices in order to restock the funds. After the price of cotton yarn has dropped, the purchasing enthusiasm of weaving enterprises has been improved. However, some small and medium-sized textile enterprises, because of the backlog of funds in cotton yarn inventory, unable to purchase cotton raw materials started, and gradually adopted the shut-down measures, which has a great impact on cotton demand in the short and medium term. In addition, cotton and yarns are traded at a price drop. The improvement in the downstream is based on the upper price. If downstream demand does not improve substantially, and cotton prices will reverse in advance, downstream demand will still weaken. At present, the downstream consumption is weak and the transmission of high cotton prices is blocked. Supply will be a secondary factor when there is a problem of demand terminal. From this point of view, cotton prices do not have the foundation of uplink. The focus of the market is still on the digestion level of yarn stock. Before the yarn inventory has not dropped significantly, the market price of cotton will still fall mainly by oscillation, and the extent of fall will also depend on the yarn sales.

In recent weeks, the number of US cotton export contracts has been negative, and the southern hemisphere cotton will soon be on sale, which is an important disadvantage for international cotton prices. It is understood that the US cotton export contract volume has negative value continuously, and China cancelled a large number of orders. At the same time, Australia cotton and Brazil cotton have a bumper harvest this year. New cotton is going to be listed and shipped on a large scale. The current price is very low, which is a great pressure on the export of American cotton and the international cotton price. Without accident, this year's global cotton market supply and demand contradictions will be significantly alleviated, and the end of the year inventory is expected to return to more than 10 million tons. In view of the large proportion of domestic industrial and commercial cotton stocks, cotton consumption is constrained by many factors. In addition, speculative capital in cotton market also began to withdraw from the market. According to CFTC's position report, many positions in the US cotton net show a downward trend since the fourth quarter of last year. Later, although weather factors are expected to provide support for the market, it is difficult to resist the impact of the weak supply of cotton market and the obvious setback of China's demand to the market.

Market panic intensified. Recently, the cotton mills continue to reduce the sale price of cotton yarn, but the turnover is still not optimistic. The phenomenon of stopping production, limiting production and changing production is continuing. And some textile manufacturers in Jiangsu, Zhejiang, Hebei and Guangdong indicated that they were affected by the drop in the price of gauze. clothing Customers wait-and-see mood is aggravating, orders are still insufficient, sunrise volume is also significantly reduced. However, a small number of yarn and cloth manufacturers in Henan, Jiangsu and other places reflect that the sales situation has improved recently, but this may only be caused by the temporary replenishment needs of some downstream enterprises, which is hardly regarded as a signal for the market to start improving. In terms of cotton enterprises, some of the enterprises that are firmly on the rise in the market have stopped selling abroad, and the cotton traders who are worried about the continued decline in the market have increased the intensity of the price reduction, but the effect is not satisfactory and the turnover is scarce. In addition, in addition to the sluggish cotton market itself, some regional agricultural development banks have put pressure on repayment of loans, and many shipments of cotton enterprises have also exacerbated the bearish atmosphere of the market.