The Price Difference Between Cotton And Cotton Has Been Narrowed.

This week, domestic cotton spot fell slightly.

Futures rose, ICE cotton rose sharply, domestic cotton prices rose sharply in India, domestic cotton prices also rose in Pakistan, domestic cotton yarn prices continued to be weak, polyester and short prices continued to fall, cotton prices in India and Vietnam increased slightly, cotton prices in Pakistan and Indonesia remained stable, and the difference between cotton and cotton yarn prices both inside and outside were narrowed.

1. Price trend

(1) cotton prices

This week, domestic cotton spot fell slightly, Zheng cotton futures rose, ICE cotton rose sharply, and domestic cotton prices in India and Pakistan rose to varying degrees.

(two) cotton yarn, polyester and short price

This week, domestic cotton yarn prices continued to be weak, polyester and short prices continued to fall, cotton prices in India and Vietnam rose slightly, and cotton prices in Pakistan and Indonesia remained stable.

(three) price difference

1, the difference between inside and outside cotton prices is narrowed.

In January 6th, the import cost of the international cotton index (M) was RMB 14727 yuan / ton (1% customs duty, customs rate, the same below), which was lower than the domestic standard of 981 yuan / ton.

Compared with last week, it reduced by 726 yuan / ton, and the cost of import of S-6 cotton in India was 13647 yuan / ton, which was lower than 2061 yuan / ton in China, and the price difference narrowed 429 yuan / ton last week. The import cost of Pakistan's domestic standard cotton discount RMB was 13244 yuan / ton, lower than domestic 2696 yuan / ton, and the price difference narrowed 232 yuan / ton last week.

2, the price difference between inside and outside cotton yarn is narrowed.

In January 6th, Vietnam's 32 pure cotton yarns were 22529 yuan / ton (the cost of imported RMB), which was 636 yuan / ton lower than that of 32 pure cotton yarns in China. The difference was narrowed by 91 yuan / ton compared with last week, and 32 branches in India.

22969 yuan / ton, 196 yuan / ton less than China's domestic 32 pure cotton yarn, the price difference narrowed 344 yuan / ton last week; Indonesia 32 cotton plain cotton yarn 22610 yuan / ton, less than 555 yuan / ton of 32 cotton combed pure cotton yarn in China, the price difference narrowed 10 yuan / ton last week.

3, domestic yarn cotton spreads widened and cotton polyester spreads narrowed.

This week, the difference between domestic yarn and cotton price was 7457 yuan / ton (32 cotton and pure cotton yarn -328B cotton price), an increase of 75 yuan / ton compared with last week, and cotton polyester difference price 7358 yuan / ton (328B cotton price polyester polyester fiber price), narrowing 60 yuan / ton compared with last week.

Two. Fundamentals

Domestic cotton supply is abundant, the national total processing cotton lint 4 million 388 thousand tons, accumulative total sells the lint 2 million 441 thousand tons; the Xinjiang storehouse quotation generally reduces 100-200 yuan / ton, the Xinjiang freight price drops 50-100 yuan / ton; the mainland spot quotation price drops simultaneously, the actual paction price falls 100-200 yuan / ton; the downstream cotton yarn sale progress is slow, the cotton mill year ago promotion promotion fund, the majority of enterprises reduce the quantity of the replenishment storehouse before the year, wait for the March 6th cotton reserves to turn out.

On the 23-29 day of December 2016, the net contract volume of US cotton exports in 2016/17 was 41 thousand and 600 tons, 47% less than that of the previous week, and 57 thousand and 200 tons of land cotton in 2016/17, a decrease of 6% compared with the previous week. The US cotton grower magazine survey showed that in 2017, the US cotton planting area was 10 million 887 thousand acres (66 million 140 thousand acres), which was 8% higher than that of USDA. The latest forecast of India Cotton Association showed that India cotton output was 5 million 865 thousand tons this year, up by 2.07% over the same period. It is estimated that the supply of new cotton will increase from January to January.

Three, macroeconomic situation

The RMB rose strongly this week. As of the end of 2016, China's foreign exchange reserves fell to US $3 trillion and 10 billion, a decrease of 41 billion 81 million US dollars, a decrease of 1.3%, a decline in sixth consecutive months and a narrowing of its decline. In December, the PMI51.9 of our new manufacturing industry increased by 1 percentage points over November, the highest since January 2013, indicating that the expansion of manufacturing industry has accelerated at the end of the year.

The US non farm employment change in December ended at 156 thousand people, less than 175 thousand expected. In December, the US manufacturing industry PMI was revised to 54.3, the highest value in 21 months, and the final value of PMI in Japan and the euro area was better than expected. This week, the Federal Reserve announced the summary of the FOMC meeting of the Federal Open Market Operation Committee, saying that the launch of the Trump policy might accelerate the US dollar interest rate increase process.

To sum up, the domestic supply of cotton is relatively abundant, cotton enterprises are not eager to buy, waiting for the March 6th cotton reserve rotation, the domestic cotton prices are expected to continue downward pressure in the short term; on the international side, the US cotton planting intention area may be higher than the market expectation this year, and the India Cotton Association adjusts India cotton production, coupled with the possibility that the US dollar continues to strengthen, and so on, it is expected that the international cotton price will also face downward pressure in the near future.

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