Cotton Prices Continue To Fall, More Pessimistic Mood

By the end of November, all parts of the country

Picking is coming to an end, but the mainland cotton seed sale progress has dropped considerably over the same period, with some agencies forecasting around 40%.

In addition, large textile enterprises frequently reduce the purchase price of raw cotton to lower the mainstream market paction price.

Cotton farmers are waiting for subsidies from the mainland to sell seed cotton, and cotton enterprises are mostly waiting to wait and see to avoid risks.

Last week (24-28 November)

The first batch of cotton subsidy has been distributed to the district and county governments, and the target farmers are cotton farmers. The subsidy amount is 191 yuan per mu, accounting for about 70% of the total area subsidy, and the rest area subsidy funds will be released later.

Recently, the price of seed cotton and lint fell slightly in Xinjiang.

The acquisition is basically over, and the purchase of seed cotton is still in progress in some areas of Akesu and Kashi in southern Xinjiang, and prices continue to fall.

As of 30 days, the purchase price of 6 yuan / kg has been hard to see in the northern Xinjiang and southern Xinjiang. The mainstream purchase price is 5.8-6.0 yuan / kg, down 27 yuan 0.1-0.2 yuan / kg, and the quality of the northern part of the tail flower is poor, and the purchase price is single.

The price of seed cotton has dropped, and the price of lint cotton has also dropped to 13400-13500 yuan / ton. The price of cotton has slowed down, but the price of caution has not changed.

Market analysis, in late November, Xinjiang cotton came out of Xinjiang and real estate cotton increased in quantity. Under the pressure of supply, the cotton vulnerable spot explored, which exacerbated the wait-and-see atmosphere of the terminal cotton spinning enterprises.

Insiders believe that the average price of domestic lint may stabilize in the first half of December, and local cotton prices will rebound slightly due to the centralized inquiry purchase of textile enterprises, but the supply pressure is still large, and the procurement of cotton textile enterprises at the end is difficult to scale continuously, and the action power of cotton prices is obviously insufficient.

Related links:

The long-awaited joint production cut was settled last weekend.

Related news shows that Yisheng Petrochemical has implemented production reduction plan since December 1st: Ningbo 1#, 2# device to maintain parking, 4#225 million tons of device parking; Dalian 2#350 million tons of device parking; Hainan 2 million 200 thousand tons of equipment in the same period dropped negative operation; Yisheng December overall operating rate dropped to 50%.

In addition, Xiang Lu petrochemical, Hengli petrochemical and other domestic PTA production also announced the same day parking inspection arrangements.

Dong Dandan, senior analyst at Guotai Junan Futures, said the PTA factory announced a massive reduction in production at the weekend, with the largest reduction in the three main factories.

"The PTA plant is doing this to better end the last month of 2014, in order to minimize the loss of stocks of raw materials and products, in order to further suppress PX, although PX is already very weak.

The joint production reduction is the biggest support for PTA spot price in December. No matter how crude oil and PX prices go next, the good trend of downstream polyester will push up the PTA price continues to be strong, because the intensity of production reduction has made PTA supply and demand have a larger gap.

She said.

She said that the production capacity of PTA and polyester was 4348 and 44 million 390 thousand tons respectively, the rate of starting up of polyester in December was 80%, and the operating rate of PTA was 60%, so that the social inventory in that month would be reduced by 400 thousand tons. If the PTA operation rate was 55%, the social stock of PTA would be reduced by 560 thousand tons.

In July, ~11 increased about 550 thousand tons of social inventory in the four months.

If the reduction is strictly enforced, the 1501 contract will reappear in the soft market.

Investors can do the ~5 months in January, the price difference may be extended to 400 points, and 1501 contracts can be followed up unilaterally.

In terms of polyester, the composite load is maintained at 8 to a higher level. Raw material demand is acceptable. Individual polyester factories increase the contract volume and PTA factory spot pressure relieved.

At present, the product efficiency is still good, and the product inventory is low, short-term device load will remain high, raw material demand is still good, production and marketing is slightly weaker; in terms of PX, affected by the weakness of the crude oil terminal, it will drop sharply, plus its supply side is loose, and the demand side will have a reduction in production stage, and a larger decrease.

At present, the price difference of naphtha -PX is still good, short term or difficult to perform well; on the PTA side, the load of the plant is still high, the substantial reduction is still not in place, and the product efficiency has greatly improved after the collapse of the cost side. The market is expected to reduce production intensity little.

In the view of spot business, HSBC November China manufacturing manager index (PMI) ended at 50, with a forecast value of 50.2 and a pre value of 50.4.

Oil prices continue to fall, naphtha and MX/PX can not be stopped, PTA is still weak, but at the end of PTA announced a reduction in production, in December, eight enterprises cut more than 10 million tons.

At the low point of polyester enterprise inventory, weaving has not deteriorated. Weaving began to change in December, and the magnitude of raw material PTA will be greater.