Lint Spot Prices Continue To Rise

Recently, domestic lint spot prices are mostly stable, some continue to rise. As of July 31, the price of 3128 grade lint in Hebei and Shandong was 15500-16000 yuan / ton, and the price of Hebei Province increased by 200 yuan / ton. According to the author's analysis, the continuous rise of lint spot price has the following favorable support:

At present, the purchase of seed cotton market has basically ended, and the ginning plants are not enthusiastic about processing. They choose to stop collecting and stop production one after another. The market source of lint is also limited. The manufacturers have no inventory pressure for the time being, and their willingness to sell at too low prices is not high, and the mentality of supporting prices still exists.

　　 Reserve cotton The deal is still hot. At present, more than 35% of the reserved cotton is auctioned by traders. This part of reserved cotton has formed commercial inventory and has not flowed to the market, which makes the spot market short-term in short supply and provides favorable support for the spot market of cotton.

According to the latest statistics of the General Administration of Customs of China, in June 2016, China imported 159300 tons of cotton yarn, down 6.8% month on month and 17.68% year-on-year; The net import volume was 129600 tons, down 7.02% month on month and 20.53% year on year. In 2015 / 16, China's cumulative import of cotton yarn was 1.707 million tons, a year-on-year decrease of 10.56%; From January to June 2016, China accumulated Imported cotton yarn 962800 tons, a year-on-year decrease of 18.68%. At present, the cotton yarn import volume continues to decline year on year. It is estimated that China's cotton yarn import volume will be about 2 million tons in 2016, which will reduce nearly 350000 tons of cotton yarn compared with 2015. According to the consumption rate of 1.1, it is nearly 385000 tons of cotton, which will be conducive to domestic cotton consumption.

Under the support of the above favorable factors, this week lint The price may continue to rise, but there are still some negative factors to restrain its rise:

As the dry weather in western Texas, the main cotton producing area of the United States, was worrisome, and the disappointing economic data dragged down the US dollar. Last week, US cotton closed up. As of last Friday, ICE1 February contract closed at 74.04 cents per pound, up 1.07 cents from the same period last week. However, Zheng Mian continued to fall. As of this Friday, zhengmian 1701 contract closed at 14545 yuan / ton, Compared with last week, it dropped 650 yuan / ton, and the futures price fluctuated, which failed to bring clear guidance to the lint spot market.

At present, the textile and clothing market will enter the traditional off-season, and the downstream orders have no substantial growth, which is mainly based on the previous orders. At present, the cotton price in the market is too high, some textile enterprises are pessimistic about the future market, and their enthusiasm for purchasing lint is still not high, and the market has a strong wait-and-see psychology.

Due to the insufficient rotation of reserved cotton, the current cotton inventory of enterprises has bottomed out and can not maintain normal production. However, the new cotton will be listed at least until the beginning of October, which means that there will be nearly a month of "grain shortage" time in the middle. Once the rotation time of reserved cotton will be extended, the cotton supply in the late market will increase, which will be detrimental to the cotton spot market.

To sum up, the short-term shortage of cotton supply in the market is difficult to change. It is expected that lint in the short term will continue to operate stably and moderately strong. However, the rotation time of reserved cotton will be extended and the market supply will increase. At that time, the risk of cotton price callback may be faced.