Cotton City Is Defeated Like A Mountain.

It has entered the early summer, and the weather has been heating up. However, the cotton market is going downhill and cooling down. This contrast highlights the recent slump in the cotton market.

After last year's crazy baptism, the overall market position of commodities has dropped sharply in recent years.

Cotton city Waterloo

V cotton market has gone through 2010 crazy rise, but now it has entered 2011 of sadness.

In the early days, there were market participants who expected 36000 of high cotton prices to have vanished.

Now the market is falling.

From the perspective of cotton fundamentals, on the one hand, supply is still relatively loose. At present, cotton supply in the world's major cotton producing countries, China, India and the United States will all increase. It is expected that the global cotton supply will be greatly alleviated in the new year.

In the new year, the main cotton producing areas in the world, including the United States and India, are affected by the high cotton prices, and the planting expectation is increasing. The supply tension is expected to ease.

On the other hand, demand is still weak, and downstream cotton yarn inventory is backlog and consumption is weak.

In the absence of rigid support from downstream demand, cotton rebound is very difficult, and the way to continue downhill is still long.

Cotton spinning is overcapacity, and even rushing for raw material rigid demand. Overcapacity is a surplus of cotton yarn at the later stage of production capacity. At present, the price of cotton yarn is much lower than that of waterfall days. After the panic booked order and high cotton price last year, the current spot market has never seen a slow-moving sale, and the large and medium sized cotton textile enterprises in the country are stocking up with regular products.

It is understood that at present, the market of the whole cotton yarn in Jiangsu and Zhejiang is still dropping sharply. Now the market price of the 40s combed yarn is 36000 yuan / ton. The price of 32S combed yarn is between 38000 yuan and 39000 yuan / ton, and the price of 40s combed yarn is 40000 yuan / ton, which is 4000 to 5000 yuan lower than that of April.

Shengze market 32S combed yarn reported 34700 yuan / ton, 40s combed yarn reported 36000 yuan / ton, 32S combed yarn quoted price 41000 yuan / ton, 40s combed yarn price 42100 yuan / ton, compared with the April decline also has nearly 2000 yuan / ton.

Today, the price of all cotton yarn and the price of embryo cloth are being lowered for shipment, but the shipment is not very satisfactory.

At present, downstream textile and clothing sales are not good, orders are reduced, market liquidity is tight, and domestic sales power is weakening.

Therefore, under the pressure of low upstream cost and low demand for terminal demand, the probability of continued falling of cotton yarn is larger.

State control calls for soft landing

Taking the healthy and healthy development of textile enterprises as the principle, the goal is to reduce production capacity and maintain a stable and reasonable price of lint prices through the adjustment period of weak market, and the state has announced the plan for temporary cotton purchase and storage in 2011.

The minimum purchase price is set at 19800 yuan / ton.

This not only releases the cotton farmers' low price signal but also provides a buffer channel for the "hard landing" textile industry; the state intends to integrate naturally with the old and new cotton prices. If the market is pessimistic and depressed, the storage and purchase procedures can be started at any time to meet the strategic reserve of the Treasury and play a stabilizing role.

Obviously, this policy made the high cotton price in the early stage become a frightened bird and accelerated the downward trend of cotton market.

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Outlook for the future

Under multiple pressures, the domestic cotton market has reached a very sensitive stage, and cotton prices are almost a bird.

Cotton prices are not smooth in the downstream, more and more evident in the order of textile enterprises. At present, the orders of most textile enterprises have declined sharply compared with the same period in previous years.

This year, the tension of domestic cotton market is not as high as expected before. Instead, suppliers are relatively relaxed, and the sales of upstream and downstream businesses are still not smooth. This will also accelerate the decline of the cotton market.