Low Demand For Cotton Downstream, Cotton Prices Rise Unable

Recently, Zheng cotton main contract continued downward 1605, the average system also diverged.

downstream

Consumption is sluggish. It is expected that Zheng cotton will continue its downtrend later.

Downstream textile consumption downturn

Constrained by the poor economic environment, the domestic demand market and the fierce competition in the export market.

The situation facing China's textile industry is more severe because of the fact that yarn and cloth occupy domestic share and chemical fiber substitution.

Consumption has shrunk.

First, textile and garment retail has improved, but the effect is not obvious.

According to the statistics of the China National Business Information Center, in October 2015, the retail sales of clothing commodities of hundreds of major retail enterprises in China increased by 1.9% over the same period last year, reversing the 3 consecutive month of decline since June. The growth rate is 4.4 percentage points faster than the same period in 2014, which is 6.7 percentage points higher than that in September.

At the same time, retail sales data show that in October, the volume of retail sales of all kinds of clothing in 100 major large retail enterprises increased by 8.5% over the same period last year, 0.5 percentage points lower than that in September.

According to the published data, domestic clothing sales improved in October, but it was not obvious. The domestic sales of China's textile and clothing remained depressed.

Second, textile and clothing exports continued to grow negative year-on-year.

According to the latest data from the General Administration of customs, in November 2015, China's textile and clothing exports amounted to US $21 billion 982 million, a decrease of 7.07% compared to the same period, down 9.71% from the same period last year.

As of November 2015, there was a negative growth in export of textiles and clothing in 10 months, indicating that the downstream consumption demand of cotton is not optimistic.

Third, the enthusiasm of the textile enterprises as a whole is poor.

Statistics show that in November 2015, the inventory of cotton stocks in textile enterprises was 419 thousand tons, an increase of 29 thousand and 600 tons compared with October, and the inventory of cotton that could be controlled by textile enterprises was 421 thousand and 900 tons, which was 15 thousand tons lower than that in October.

In that month, cotton spot market resources were relatively abundant. Most enterprises were worried about the limited number of high-grade cotton, and later procurement was not easy to group, but centralized replenishment.

However, due to the lack of confidence in the market and the tight funds, many enterprises maintain a relatively low disposable inventory and weaken their purchasing intention later.

High inventory is the market's "bruising"

The US Department of agriculture's December supply and demand report predicts that the total cotton output in 2015/2016 will be 22 million 580 thousand tons, 417 thousand tons lower than the November forecast value, the global consumption of 24 million 252 thousand tons, the reduction of 44 thousand tons, the global import and export volume of 7 million 700 thousand tons, the increase of 220 thousand tons, the end of the global period 22 million 729 thousand tons, the reduction of 369 thousand tons, and the global inventory consumption ratio of 93.72%, down by 7.76 percentage points year-on-year.

In the December supply and demand report, global cotton production was cut down, consumption dropped slightly, inventories were reduced, and overall cotton prices were much higher.

However, the global inventory consumption ratio is still high, and the pattern of supply easing has not changed. High storage is still the "bad injury" that restricts cotton prices up.

To sum up, the terminal demand of cotton downstream is low, which restricts the textile enterprises to take the goods, thereby dragging their enthusiasm for stocking.

Moreover, the shortage of funds in textile enterprises is relatively common, which restricts the procurement progress, and the supply of cotton market is still loose.

Before the substantial improvement in downstream consumption, cotton prices rose powerless.