The Delayed Delivery Of Cotton Reserves Is A Short-Term Pain For Textile Enterprises.

The national development and Reform Commission held a meeting on the issue of cotton reserves and decided to extend the delivery period to a month until the end of September.

The news came out, the market responded quickly, and the volume of trading went down in the next few days, after which the market panic was relieved.

In this regard, China Cotton Association has recently visited cotton textile enterprises in Hubei, Wuhan, Xiaogan, Jingzhou, Xiangyang and other regions, and held a forum to understand the current production and operation of textile enterprises.

Recently, due to

Not yet officially released, the market is still questionable, cotton futures prices fluctuated, after a continuous decline, a rebound, to the spinning enterprises inventory inventory has brought trouble.

According to the suggestion of textile enterprises, it is hoped that relevant departments will announce the policy of postponed release as soon as possible in the form of official documents, and give the market a reassurance so that the policy results can be brought into full play.

Judging from the overall situation, cotton prices have been rising all the way, and the price of gauze is difficult to rise. In order to avoid risks and reduce losses, some enterprises have been phased out.

According to reports, the average operating rate in the region is about 70%.

For the delayed delivery of cotton reserves, the textile industry said it was more painful in the short term.

As the price of gauze in the early stage is lagging behind, it has been accepted by the downstream factories and garment factories in recent days. The news of the extension of the delivery period has loosened cotton prices for a short time, and the price of yarn has been under pressure from customers again.

In addition to the previous purchase at a higher price.

The loss of cotton textile enterprises is once again facing the pain of price reduction after suffering from the price increase.

However, the textile industry agreed that in the long run, the delay was put in place before the new cotton market came into being.

It has been guaranteed that it is no longer worried about "no rice under the pan", but also reduces the risk and financial pressure brought by more inventory. At the same time, it has played a stabilizing role in cotton prices, and has largely avoided the speculation and speculation opportunities of capital.

According to investigation and research, the extension of the delivery period was praised by the textile enterprises.

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Domestic cotton output in 2016/17 is expected to be around 4 million 500 thousand tons, but due to frequent rainstorms in the mainland in the past two months, there is still room for reduction in domestic output.

There is not much change in imports, and it is believed that this year will maintain a low level (not more than 1 million tons).

In terms of reserve cotton delivery, in July, with the strong demand from downstream textile enterprises to increase the quantity of inputs, the output of cotton reserves rose more than in June, but the government failed to fully fulfill the promise of 3-5 tons per day.

Almost daily turnover was maintained at 100% in that month, and the average price of the paction jumped to 13000 yuan / ton from the beginning of the month to 15500 yuan / ton.

At the end of the month, the relevant news said that the cotton reserve will be extended to September 30th, increasing the delivery time for one month, and the market atmosphere will change immediately, and the average price will drop to 14500 yuan / ton line.

We estimate that the reserve will be supplied for 202-222 tons in four months this year, and the remaining market volume will be 80-120 tons at the end of the year.

The dumping and storage will extend to the end of September, which will increase the supply of 40-60 tons per month or 242-282 tons in 2016.

The consumption of the lower reaches is estimated at 55-60 tons / month, and there is no theme that can be hyped. The focus of the market is still on the supply side.

Conclusion: in August, when the news of dumping and storage postponed for one month, the short term domestic cotton market will maintain a weak pattern. However, we believe that the downlink space is also limited, and the latter will enter the concussion period smoothly and move smoothly to the new year.

From the international point of view, at the end of the year, there is no new supply of cotton and India cotton, and the price of cotton and outer yarns will be relatively strong, which will form a support for China.

From the domestic point of view, the panic in the downstream can be relieved by the delay in dumping and storage. In July, the high turnover rate of nearly 100% of the reserves will decline or the monthly output of the cotton reserves will decrease.

We made an extreme contrast. We did not postpone the turnover of 600 thousand tons in August, postponed 8 and 9 for two months and maintained 400 thousand tons / month. The total supply actually increased by only 200 thousand tons, and the impact was very weak.

Therefore, we believe that despite the bad policy, the market is hard to fall.