Weakening Demand In China Leads Us Cotton Down

Last week, the 1503 main contract of ICE cotton futures market fell to its lowest level in 5 years, down to 58 cents / pound.

Although rebounded after a sharp fall for two consecutive days, it rose from 58.75 cents / pound to 59.63 cents / pound, but this did not change the downward trend of ICE cotton.

At present,

India and new cotton have been listed, supply and sales pressure will increase. Although the latest signing export situation has improved, shipments are still not optimistic.

According to the analysis of the industry, the export data of the US cotton market is likely to fall sharply, thus forming a "chain reaction". It will continue to encircle and suppress the ICE bull market. The main contract or down to 58 cents / pound support will march to the 55 cent / pound level. The reduction in the demand for imported cotton by the largest consumer country and importing country in 2015 will determine whether the ICE main contract can fall to 55 cents / pound.

Wu Faxin, general manager of Guangzhou Yarn Import and export company, said that if the US cotton fell to 50~55 cents / pound, while domestic cotton remained at about 14000 yuan / ton, a large number of imported cotton yarn, especially the conventional varieties under 40, would enter the Chinese market once again, impacting the small and medium-sized textile enterprises in China.

Since 2012, China's imports of yarn have seen rapid growth, when imported cotton yarn 1 million 526 thousand and 500 tons, an increase of 69.01% over the same period.

In 2013, although the growth rate declined,

The total volume exceeded 2 million tons mark.

Since 2014, the overall atmosphere of China's import yarn market has changed and imports have been decreasing.

Recent statistics show that 1~10 months, China's total imports of 1 million 640 thousand tons of cotton yarn, the cumulative total year-on-year decline again, a decrease of 6.3%.

In fact, one of the main reasons for the rapid growth of import yarn in 2012 was that the domestic price of the cotton was greatly reduced because of the domestic price of 19800 yuan / ton.

At that time, some imported cotton yarn prices were even lower than domestic cotton prices, attracting a large number of imported yarn, and cotton yarn imports increased significantly.

The industry believes that the US cotton prices have fallen sharply, which is likely to happen again.

Cotton, even the stock of cotton in downstream textile mills, will become a heavy burden.

In addition, the ICE futures fell sharply for two consecutive days. The price of Port Bonded, spot and 2014/2015 American cotton has been greatly reduced. With the arrival of new cotton in the US and India, and the tightening of quota policy, the situation of cotton sale outside the port is even more severe.

According to some traders in Qingdao, Zhangjiagang and other places, the demand for quotas began to rebound strongly in the near future, and the market pfer price rose and went up again. It is estimated that 1% import quotas within the tariff will be "high priced and few", and the quotas for processing trade import will be "very difficult to use", so the quotas will also form a strong support for the quotations of cotton after the customs clearance.