Why Is The Spot Price Of Domestic Lint Down?

1, the futures market is sluggish, affecting the spot market of lint. ICE cotton continued downward trend in the fall of commodity futures and pressure of supply and demand. In December, the contract reached a low point of 62 cents. Although traders in November 6th adjusted their positions before the USDA monthly report, ICE cotton followed grain prices from a low level, but the market was not optimistic about the prospects for us cotton exports, and the fundamentals would continue to exert pressure on cotton prices.

In November 7th, Zheng cotton's main force CF1501 contract closed at 13420 yuan / ton, down 190 yuan / ton compared with 13610 yuan / ton in October 31st, and the futures market was weak downward to suppress the spot market of lint cotton.

2, high inventory, low demand constraints. At present, the state reserve cotton stocks are high, plus about 6000000 tons of cotton output this year, and 894 thousand tons of 1% tariff cotton import quotas. The supply of cotton is very loose enough to meet the cotton consumption demand of 2014/15, especially after November. pick cotton In succession, the new cotton in the mainland has also been listed. The market is rich in resources and restricts cotton prices.

3. Spinning enterprises Replenishment is coming to an end. Since November, the price of domestic cotton yarn has continued to decline slightly, of which 21 and 32 prices have fallen by 150-300 yuan / ton, and the price of imported yarn has also decreased by 100-200 yuan / ton. In order to reduce the cost of raw materials, textile enterprises have a cautious attitude towards the purchase of lint, except for the purchase of high quality cotton and high quality cotton.

In addition, according to part Textile enterprises It is reflected that raw material inventory has been replenished since mid October, and the purchase of cotton is not urgent in the near future. Therefore, cotton enterprises are quick to withdraw funds, and there is no shortage of sales of cotton lint.

In summary, the author thinks that under the above negative factors, the spot price of lint is still on a downward trend. However, this year the cotton market is delayed and the output is lower than the previous forecast. Cotton farmers' enthusiasm for selling cotton is not high, and the processing profit of cotton enterprises is not good, the overall start-up rate is not high, and the output of lint cotton is relatively limited. At the same time, this year, the state has allocated additional duties in addition to 894 thousand tons and 1% tariffs. In principle, cotton import quotas will no longer be issued to guide enterprises to use domestic cotton, and they will not be thrown aside before March 2015.