Before The Spring Festival, What Trend Will Cotton Yarn Take?

Market rumors

The price of pure cotton yarn rebounded in Nantong yarn, and some manufacturers rebounded 100-200 yuan / ton before, and demand rebounded.

The author has confirmed that many market participants have reflected that the demand for pure cotton yarn has indeed recovered in recent days, but it is still confined to the rigid demand stage. There is a demand for replenishment in order to complete the order or catch up production plan some years ago. However, most manufacturers have no hope for the pre market quotations, and indicate that the recent shipments have significantly decreased.

The coexistence of good and bad has broken the old pattern of supply and demand, and then emerged.

The double phenomenon of rebound and low price reluctant sale.

It is reported that the domestic pure cotton yarn is still showing a weak and stable overall situation, and the pattern of adequate supply and weak demand has not changed.

Talking about profits is still a pain for textile enterprises.

According to the author's understanding, in 2014, most of the pure cotton yarns of textile enterprises were worrying or even losing money, especially in the first half of 2014, because of the high cost of cotton production, the sluggish sales of conventional pure cotton yarn and the unilateral decline of market prices, the textile enterprises were suffering from a lot of suffering.

However, since the sharp reduction of cotton throwing and storage prices began to bring warmth to the textile enterprises in April, some textile enterprises realized positive profits before and after May, but maintained only around 300 yuan per ton / ton.

After cotton direct subsidy, the cost of cotton prices has dropped significantly, and the profitability of textile enterprises has improved greatly in the fourth quarter.

At present, most of the spinning enterprises have regular profit in pure cotton yarn, but the rate is not large, which is more than 200 yuan / ton. However, the yarn profit of high package bleaching is good, up to 1000 yuan / ton, but there are not many profitable textile enterprises.

This situation persists in 2015.

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Since the beginning of the new year, Zheng cotton futures have not been shocked. The main 1505 contract is hovering around the 13000 yuan / ton line, waiting for directions.

Although the US and China's cotton planting intentions both declined this year, the expected increase in production is a strong support for cotton prices. However, in the face of the weak cotton demand in the lower reaches of the country, the uplink of cotton prices still lacks enough courage.

As the Spring Festival draws near, the operating rate of textile enterprises continues to decline, and the purchase and sale of pure cotton is showing weakness. It is estimated that the cotton price before the festival will also maintain the consolidation trend.

In the past 5 years, the continuous decline of international cotton prices has made the cotton growers of the world fall to freezing point.

According to Bloomberg survey, the willingness of US cotton growers to plant cotton is significantly lower this year. It is estimated that the US cotton planting area will be reduced to 9 million 730 thousand acres.

According to the findings of the cotton association of China in January this year, 2760 cotton farmers in 310 provinces and cities in the 12 provinces of the mainland and 310 counties in Xinjiang autonomous region, the cotton growers who were prepared to reduce cotton planting area in this year accounted for 59.65%.

Among them, cotton farmers in the the Yellow River River Basin and the Yangtze River Valley are expected to reduce their planting intentions by 42.21% and 41.87% respectively in 2015 because of low cotton prices, low yield and increased labor costs. The planting intention in Xinjiang cotton region will also be reduced by 11.5%, and the average planting intention in the whole country will be reduced by about 25.4%.

It is estimated that the cotton planting area in 2015 will be reduced by 11 million 725 thousand and 600 mu from 59 million 20 thousand mu in 2014 to 47 million 294 thousand and 400 mu, with a drop of 19.87%.

Apart from the sharp decline in cotton planting area and output in China and the United States this year, the cotton planting area in India will also decrease.

According to the February production and demand forecast released by the International Cotton Advisory Committee (ICAC), it is estimated that the global cotton planting area in February will be reduced by about 6%, to 31 million 600 thousand hectares.

If we calculate the global average yield per kilogram of 777 kg / HA in the past 5 years, the world's cotton output will be 24 million 600 thousand tons, down 6% from the same period last year, the lowest level since 2009/2010.

The International Cotton Advisory Committee estimated that global cotton consumption in 2015/2016 was 24 million 700 thousand tons, an increase of 2% over the same period last year.

This will be the first time that cotton consumption has exceeded production in the past 5 years.

Although the gap between supply and demand is only about 100 thousand tons, it is still a drop in the bucket compared with China's huge cotton inventories, but it is expected to end this year's domestic cotton market's continuously rising inventory consumption ratio, and the situation of oversupply is expected to improve.

The domestic cotton market is expected to adopt the policy of first protecting the sale of new cotton and then selling cotton and releasing cotton.

Therefore, under the background of global cotton production reduction, domestic cotton market supply pressure will be reduced.

In the medium to long term, the pattern of oversupply of cotton market will gradually shift, which will help cotton prices rise steadily.

But before the Spring Festival, the cotton price will continue to be consolidated by the downstream demand side.

According to the author's understanding, because of the long holiday approaching, domestic textile enterprises are stepping into the light period before the Spring Festival, and the production rate continues to increase. The overall average operating rate has dropped to below 50%.

In the context of the lack of terminal demand, cotton prices are likely to fall, and sales will continue to shrink. Most manufacturers will choose to close their businesses ten days before the Spring Festival. Therefore, the demand for cotton market remains weak before the recovery.