Beijing Convened The China Cotton Association Meeting: Beginning In Late April

Although the cotton throwing and storage policy has not yet been formally promulgated, recently, at the China Cotton Association meeting held in Beijing, it has been basically clear that it will start dumping in late April. As a result of larger reserves this year, textile companies are very cautious in purchasing at present, and basically keep the minimum, which leads to unsmooth shipments of cotton and spot prices continue downward.

At the recent cotton forum held in Wuhan, the leaders of the State Cotton and storage company elaborated some details of the dumping and storage, which had a great impact on the market outlook. First of all, the initial dumping is mainly imported cotton, mainly to meet the needs of high-grade cotton. The imported cotton has roughly 300 thousand tons, and the storage time may last for nearly 1 months. This means that until the beginning of June, market cotton consumption will be dominated by domestic cotton, which will accelerate the digestion of new cotton this year.

Secondly, Dumping price Based on the weighted adjustment of spot price index at home and abroad, it means that the price of dumping and storage is fluctuating. Fluctuating prices tend to spiral or spiral downward. At present, the late market demand is expected to spiral upward. However, the probability that foreign cotton prices remain weak will increase the downward pressure on the price of dumping and storage. The final balance may be based on the fact that the price difference between the inside and outside reaches a more balanced position, that is, the internal and external spreads may expand again.

Finally, the quality and weight of national cotton stores will be strictly re examined this year. In the past few years, textile enterprises have been very helpless about the state of the State Cotton losing weight, resulting in the textile enterprises' participation is not active. If we can solve the problem of deficit weight this year, we will effectively enhance the enthusiasm of our enterprises and speed up the progress of our country's cotton stocks going out of stock, but at the same time, they will also occupy the new flower market share this year.

Affected by the expected storage of the above national cotton reserves, the market is involved in spot purchase and sale. Textile enterprises Rather passive, there is no willingness to enter the market, take the strategy of buying and using, and suppress the spot market.

Domestic cotton prices have dropped considerably over the past two years, improving the supply and demand relationship from the following aspects and raising the demand for cotton in the future.

First of all, domestic cotton spot prices fell, narrowing the difference between inside and outside cotton prices, and then controlled. Import yarn Number. Statistics show that in recent months, cotton yarn imports began to grow negative year-on-year. In February, China imported 120 thousand tons of cotton yarn, down 28.20%, down 6.56% from the same period last year, and imported 280 thousand tons of cotton yarn, a decrease of 18.9% over the same period last year. More domestic demand is expected to come from domestic cotton in the future.

Secondly, due to the narrowing of the price difference between inside and outside cotton mills, the small cotton mill that had been squeezed by foreign cotton mills has revived. Because the National Reserve will throw a lot of cheap and low quality cotton, it will help reduce the production cost of low count yarn. Some small and medium-sized textile enterprises that have withdrawn from the market have indicated that preparing to rejoin the yarn market will also enhance domestic cotton demand.

In addition, the price of viscose staple fiber and polyester staple fiber has increased significantly this year. At present, cotton prices are lower than viscose staple fiber 2000 yuan, less than 5000 yuan for polyester staple fiber prices. The negative effect of yarn substitution has weakened before. However, due to the upgrading of chemical fiber quality, the consumption of chemical fiber continues to grow. It is expected that the proportion of cotton consumption will continue downward, but the total amount can be stabilized or slightly rebounded.

Combined with the above analysis, I believe that before June, the recovery of downstream demand is not yet clear, and cotton prices will be dominated by weak shocks. There is still room for a drop in the spot market, but the cotton 1609 contract is limited because of the larger discount, or the oscillation at 10000 yuan / tonne. But after June, the advantage of low price of domestic cotton will gradually appear, and domestic demand for cotton will increase. In the case of new cotton production reduction obviously, although the sale of national cotton and cotton will meet the market demand, warehouse receipts have been gradually consumed, or there is a buying value.