Will The Cotton Market Return To Its Original State?

In contrast to the great heat of selling cotton reserves

The electronic matching of commodity cotton did not stabilize or re create the annual new high. Instead, it continued to oscillate callbacks. Zheng cotton's contract in recent months gradually moved closer to the Xinjiang cotton spot from the spot price of 800-1000 yuan / ton. In May 9th, the CF1609 contract fell 12000 yuan / ton (11865 yuan / ton) again, causing widespread panic among Cotton Traders and traders.

From the perspective of market feedback, with the further development of cotton reserves, textile enterprises and traders will become increasingly rational in bidding. The market is expected to lower the spot price of cotton in late May with the decline of the reserve price of futures and reserve cotton. After the wave of capital speculation, cotton enterprises, spinning enterprises and traders will return to reason.

First, from the point of view of calculation,

Spinning has only 500-1000 yuan / ton profit margin, and the profit risk will increase after market.

Recently, the ICE cotton main contract has fallen by more than 3 cents / pounds. The domestic cotton price in India has also declined at a high level. The price of international cotton yarn CNF and CIF is inevitable. The cost of domestic spinning also decreases after the storage of cotton spinning, and whether it is difficult to judge whether the internal and external cotton yarn is combined to descend, thus greatly reducing the expected profit margin.

In May 9th, Zheng cotton and commodity cotton electronic matching have dived, and the impact on dealers of ICE cotton and participating cotton auction can not be underestimated. Downstream weaving,

The fact that foreign trade companies can't follow orders and prices can hardly lead to cotton breaking away from fundamentals.

Second, the US dollar strengthened and the ICE cotton fell below 62 cents / pound.

In March, the US Non manufacturing index, durable goods orders performance and early April unemployment figures were excellent, giving the us enough support, so the Fed's interest rate hike in June or July was again noisy.

The rebound in commodities was blocked, and the pressure descended into a big probability event. Moreover, from April, China's import and export data fell again, and after April, CPI entered the downstream channel, and PPI continued to narrow. In March, the recovery of economic data was just an illusion, and the rebound of commodities is likely to be lost.

Third, textile and clothing gradually entered the off-season, and demand remained variable.

It is understood that in the middle of 5, orders for garments, fabrics, grey fabrics and cotton yarn will gradually come to an end, and the production and sale of OE yarn and C21-C40S yarn will be far away.

Because of the difficulty of increasing the price of textile and clothing, and so on, many looms factories and trading companies are facing no profit or even loss. Cotton spot has risen by 800-1000 yuan / ton, cotton yarn has only risen 200-300 yuan / ton, grey fabrics and fabrics are standing at a steady pace, and the cost increases cannot be pmitted. The problem of gastric indigestion is prominent.

During the May 1st period, some small weaving enterprises in Henan, Shandong, Jiangsu and Zhejiang had been on vacation for a long time.

Although in the short term, the reserve cotton has reduced the cost of spinning enterprises to a certain extent, but the shortage of orders, the decline of yarn quality and stability and the tight funds have seriously restricted the pace of downstream enterprises.

Some spinning enterprises and traders believe that the average daily output of cotton reserves will be maintained at around 30 thousand tons this week, and the hot spot of the auction will also gradually cool down.

On the one hand, some cotton textile enterprises and intermediaries have been relieved of raw materials inventory, and there are more considerations on downstream consumption and peripheral market and economic environment. It is expected that wait-and-see sentiment will increase. On the other hand, the "cotton and cotton" electronic matchmaking disk has taken the lead in returning to reason.