Domestic Lint Spot Prices Are Mostly Stable And Individual Continues To Rise.

Recently, domestic

Spot prices are mostly stable and individual continues to rise.

As of July 31st, the price of lint 3128 in Hebei and Shandong was 15500-16000 yuan / ton, and Hebei rose by 200 yuan / ton individually.

The author analyzed that the spot price of lint continued to rise with the following favorable support:

1, manufacturers still have limited supply of goods.

Current seed cotton

The acquisition is almost over, and the processing enthusiasm of the ginning mill is not high. After stopping production and shutting down, the market is also limited. The manufacturers have no inventory pressure at all, and are not willing to sell at low prices.

2, market supply is tight, supporting the spot price of lint.

The paction is still hot. At present, more than 35% of the reserve cotton has been sold by the traders. This part of the reserve cotton has formed commercial stocks, and has not gone to the market, which makes the spot market short supply in short time, and provides a good support for the spot market of cotton.

3, cotton yarn imports decreased year by year, which is conducive to domestic cotton consumption.

According to the latest statistics of the General Administration of Customs of China, in June 2016, 159 thousand and 300 tons of cotton yarn imported in China decreased by 6.8%, down 17.68% from the same period last year, and net imports were 129 thousand and 600 tons, down 7.02%, down 20.53% from the same period last year.

In the year of 2015/16, China imported 1 million 700 thousand and 700 tons of cotton yarn, a year-on-year decline of 10.56%. In 1-6 months of 2016, China imported 962 thousand and 800 tons of cotton yarn, a year-on-year decline of 18.68%.

At present, the import of cotton yarn has continued to decline compared with the same period last year. It is estimated that the cotton yarn imports in China will be around 2 million tons in 2016. The cotton yarn with nearly 350 thousand tons less than that in 2015 will be calculated according to the consumption rate of 1.1, that is, nearly 385 thousand tons of cotton, which will benefit domestic cotton consumption.

With the support of the above favorable factors, lint prices continued to rise this week.

1, futures price shocks have not yet brought clear guidelines for the lint spot market.

Because of the dry weather in Western Texas, the main cotton producing area, and the disappointing economic data dragged down the US dollar, the US cotton rose last week. As of last Friday, ICE12 month contract closed at 74.04 cents per pound, up 1.07 cents from the same period last week, but Zheng cotton continued to decline. As of Friday, Zheng cotton 1701 contract closed at 14545 yuan / ton, down 650 yuan / ton compared with last week.

2, the textile market has entered the traditional off-season, and the enthusiasm for purchasing is still not high.

At present, the textile and garment market will enter the traditional off-season, and the downstream orders have no substantial growth. Basically, the goods are mainly based on the previous orders, and the price of the cotton market is too high.

3. Increase or decrease in storage time and increase market supply.

Due to the insufficient output of cotton reserves, the current cotton inventory of enterprises has bottomed out and can not maintain normal production, and the new cotton market will have to wait until at least the beginning of October, which means that there will be nearly one month's "grain break" time in the middle.

Once the rotation time of reserve cotton will be extended, the supply of cotton will increase in late market and the spot market of the bearish cotton.

To sum up, the short supply of cotton in the market is temporarily difficult to change. It is expected that the lint will continue to operate steadily in the short term. However, when the storage time is longer and the market supply will increase, the risk of cotton price callbacks will be faced.