Behind The Huge Increase In Cotton Market

In the spot market, cotton prices are relatively low, and a certain rebound is normal.

However, due to the huge inventory and market consumption, the pressure on the cotton price is still high.

Behind the sharp increase in market position is actually the confrontation between the two forces.

The basis of the empty side is still worth paying attention to.

First, high storage pressure.

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Treasury stocks of 10 million tons can be accumulated indefinitely unless it can be permanently accumulated.

The national reserve is blowing, and it is intended to throw away the reserves.

The mountains on the top of the cotton price will be unloaded.

The two is the adverse consumption of cotton prices.

According to market research, the operation situation of domestic and large textile enterprises has improved slightly recently, but the profits of pure cotton spinning enterprises in the middle and lower branches are few.

Why?

Cotton is going through life.

The pain of viscose substitution.

Three, throwing and storing will eventually be launched.

In order to get rid of inventory, the government has reduced the quota of cotton imports this year, which is limited to 894 thousand tons of tariff quotas.

According to the current market surplus of cotton resources estimated in the current year, after the import resources are blocked, the domestic cotton supply will basically maintain a tight balance in the future, which will create conditions for dumping.

Reserve is to guarantee supply.

Four, the competitiveness of textile enterprises needs low price cotton support.

From the perspective of the expectation of the enterprises, in order to maintain the competitiveness of China's textile enterprises in the international market, the domestic cotton price must maintain the normal price ratio (1000 - 2000 yuan / ton) with the international cotton price, that is, the domestic cotton price is in line with the international cotton price.

At present, the price difference between domestic 3128B grade cotton price and FCINDEXM1% tariff is 1828 yuan / ton, which is within the scope of affordability.

While the internal and external spreads under sliding tax and 40% customs duties are negative, but because of the downturn in downstream demand, they lose operational significance.

Therefore, in essence, the high domestic cotton prices caused by the national reserve purchase and storage have already hurt the competitiveness of domestic textile enterprises.

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It is understood that in the middle of April, the futures contracts of Zhengzhou Futures rebounded, and 5-9 months later, due to the enhancement of the spot shortage of high-grade cotton, and the promotion of the sales of cotton yarn and cotton cloth, and the high supply of C40s and above, and the tight supply of combed cotton yarn, the cotton textile factories and cotton traders in the mainland in the past week had increased significantly compared with March.

Some small and medium-sized textile enterprises said that because of the current port can choose to clear high-grade high-grade cotton, Brazil cotton quantity is not much, in early May issue, commercial bank loan is expected to be in place, in cotton and other raw material inventory less than 2012-2014 years, the object of replenishment will be high grade Xinjiang hand picked cotton.

Cotton processing enterprises in Akesu, Bazhou, Korla and other places also reflected that, at the end of April, the willingness of some cotton textile factories to sign contracts for purchase and sale increased considerably. However, due to tight capital flows, most of them hoped that the contract execution period would be extended to 20 days or 1 months, so as to ensure timely payment of loans and recovery of goods.