Reserve Cotton Auction Postponed Breaking Rate Of Success, All Enterprises Took A Reassurance.

China cotton reserve management company plans to sell 150 thousand and 100 tons of cotton reserves, and 85 thousand and 600 tons of actual cotton products, all of which are domestic cotton, with a turnover rate of 57%.

As of August 5, 2016, the cumulative output of reserve cotton in 2015/2016 was 1 million 702 thousand and 800 tons, of which 1 million 406 thousand and 700 tons were made for domestic cotton and 296 thousand and 100 tons for imported cotton.

Some enterprises failed to pay the goods on time, and the corresponding contracts were disposed of according to the breach of contract, totaling 7 thousand and 800 tons.

Zhou,

Listing sales increased by 900 tons compared with the previous week.

A reduction of 62 thousand and 600 tons and a reversal of normal cotton turnover were recorded. The turnover rate plummeted from 99.37% last week to 57%.

In August 8th, the national development and Reform Commission and the Ministry of Finance jointly issued a notice, clearly pointing out that "the deadline for sale and sale of national cotton reserves in 2015/2016 is extended from August 31, 2016 to September 30, 2016, and the total annual output is not limited to 2 million tons, and the final number of actual turnover will prevail."

As soon as the news came out, all enterprises were reassured.

In terms of yarn, textile enterprises are constantly raising the price of cotton yarn, which is affected by the rising cost.

The overall price level continued to rise 100-200 yuan / ton compared with the previous week, and the downstream market has limited capacity, and the actual turnover is not ideal.

In addition to the the Yellow River Valley, Xinjiang and

The main cotton producing area is dominated by clear weather, with sufficient light, which is very beneficial to cotton growth. The cotton field in Xinjiang is growing better than in previous years. A large number of cotton bolls are already sitting on peach and the yield is in sight. The weather in the Yellow River basin is mainly rain and litter, which causes cotton growth and development to be late. Although some of them are already bolting, the bolls are generally small.

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Since the rumors issued by the national cotton mill will be postponed, not only the average daily price of Zhengzhou cotton and the national cotton store auction, the domestic cotton (14870, 350, 2.41%) spot quotation has fallen considerably, and since July 29th, the proportion of state-owned cotton storage has decreased to 96.75%, 87.85% and 74.40% on the three trading days, which is in sharp contrast to the 100% pactions in the previous 24 consecutive trading days. The earlier traders who hoarded stocks of large quantities of national cotton reserves chose to suspend the auction, and the enthusiasm of textile enterprises to participate in the national cotton auction was picked up. For example, the auction proportion of textile enterprises in the week of 25-29 days in July was 64%.

Second, if the national cotton reserves are delayed, it will be equivalent to an increase of about 600000 tons in terms of the current 30 thousand tons of listed resources per day. As of August 2nd, the cumulative turnover of 1 million 674 thousand tons is still around 20 trading days at the end of August, and the average daily output of 30 thousand tons is calculated. At least about 1200000 tons of state-owned cotton stores are listed before the end of September, and the annual output of 2015/16 will be close to 3 million tons. After September, the gap between supply and demand can be manifested; there are three variables. Thirdly, after the capture in 5-7 months, the majority of traders hoarded the reserve cotton stocks in a larger scale, and the reasons for the larger number of cotton stocks, such as gambling 9 and October green, did not meet. First, traders on the national cotton storage policy.

Some textile mills participating in the auction said that the focus of the buyer's bid auction is the quality of Xinjiang cotton, especially the hand picking cotton produced by the Xinjiang regiment in the southern part of the regiment in 2012 and 2013. "12" 13 "and" 22 "" 23 "are favored, and the reserved cotton with low grade, low quality and low spinnability is no longer fully collected.

On the one hand, compared with the C21S and below low count yarn, the C40S and above high spun yarn increased even more, and the textile factories were more inclined to spin high count yarns and combed yarns. Moreover, since June 15th, the lowest paction price of the national cotton store has increased by more than 50% (the lowest price in May 3rd is 9730 yuan / ton, and the lowest price in July 18th is 14650 yuan / ton).

On the other hand, entering the August, orders for high count yarn in trading companies and weaving factories gradually increased (mainly for proofing and placing orders in spring and summer in 2017). Orders for OE yarn and low spinning ring spinning decreased rapidly, taking into account that there was a shortage of 1% import quotas for tariffs (bonded cotton or Australian cotton and uygurn cotton procurement were more difficult in the period of bonded or 8/9 months), the price of cotton CNF and CIF remained high, and Xinjiang cotton had been supplied without quantity in the year of 2015/16.

For the trend of cotton prices in 8 and September, both sides agree that the national cotton storage and control policy is the key. The focus of the dispute is whether the current 30 thousand ton daily output can be maintained until the end of September, and if there is still a gap before the end of September, whether Xinjiang will be listed.

Cotton processing enterprises and cotton textile mills hope that the price of cotton spot before new cotton will fall back to the 13000-14000 yuan / ton body, which will help the cotton mill to gain the courage to buy seed cotton, help cotton textile enterprises to import large quantities of orders and improve the competitiveness of textile and clothing. However, for the cotton trade that has been hoarding for sale, once the sale price of national cotton in the spot market is less than 13000 yuan / ton or even 13500 yuan / ton in 2012/2013, traders will face the danger of being deeply stuck, and will not be conducive to the operation of the cotton market in 2016/17.

The author believes that the key to cotton prices to the left or right is whether the national cotton regulation will continue to exert force and the strength of fist attack. Traders are pessimistic at this time.