Excellent Cotton Prices Are Not Sustainable: Supply And Demand Tends To Be Reasonable.

Vibration market, spot confusion, ICE cotton rising and falling each other, the market again to "up and down" moment, how the cotton market in recent years how to move? How to operate? The author summarizes three problems, in the exchange with friends, understand the following situation.

One question: how do we see the sharp drop in the turnover rate of real estate cotton this week?

Answer: market bullish confidence is blocked.

Recently, Zheng cotton and ICE cotton oscillations fell, giving confidence to the bulls.

The sharp rise in the base price also caused some impact. This week, the base price was raised by 333 yuan / ton.

Reserve real estate cotton in the recent increase in the price of 200 yuan / ton up and down the increase in the base price, the storage enterprises temporarily unable to accept and digest.

Two question: Recently, the turnover rate of Xinjiang cotton is still 100%, indicating that the market is still "hot".

Answer:

Sought after.

In the year of 2011-2013, Xinjiang cotton is high quality and can be spun for 40S and above yarn both in fiber length, horse value and breaking ratio. The two is that Xinjiang cotton is settled by public settlement, while in the spot market, it is settled by gross weight. The return rate of Xinjiang cotton in 2011-2013 years is 8-9%, resulting in a higher premium.

Three, the quality of Xinjiang cotton produced in 2016 is concentrated in the hands of several large traders and large textile enterprises, resulting in a shortage of supply and demand in Xinjiang cotton market.

Reserve Xinjiang cotton price stabilizes.

This week, although the turnover rate of Xinjiang cotton is still 100%, the average fare increase is only 700-800 yuan / ton this week, compared with the 1000-1200 yuan / ton price range of last week, which has dropped by 300 yuan / ton. Although the base price of this week has been raised, the actual price of the actual textile enterprises and traders has not changed much compared with last week.

At present, the reserve price of New Territories cotton is temporarily stable, which shows the cautious psychology of the company.

Answer: in recent years, domestic cotton yarn is not prosperous in the peak season, but lighter in off-season.

There is no obvious difference between the weak market and the weak season.

Recently, sales of cotton yarn OE10-16 are still good, but C21S, C32S and JC21S cotton yarn, which are sold well in the early stage, have become increasingly deserted.

According to the manufacturer's statement, the overall price of cotton yarn in JLU and Jiangsu and Zhejiang markets has been reduced by 200-300 yuan / ton.

Especially the downstream payment is not timely, even the frequency of bad debts and bad debts is obviously higher than that in the first quarter of this year.

Therefore, textile enterprises insist on buying and selling upstream materials, and resist high prices.

With the above three questions and three answers, it is urgent to see clearly the market in front of us. The cotton market will be gradually cooled down.

Affected by the improvement of cotton planting efficiency and the enhancement of cotton growers' planting intention, the cotton planting area in China was projected to be 3 million 200 thousand hectares in 2017/18, an increase of 3.3% over the previous year and a total output of 4 million 880 thousand tons, an increase of 3.2% over the previous year.

On the one hand, under the stimulation of higher cotton yield and price subsidy in 2016 and the stability of the subsidy policy in the next three years, the cotton planting area in Xinjiang cotton area is expected to increase. On the other hand, the cotton growing efficiency in the mainland cotton area has improved significantly, stimulating the area to rebound.

Due to the large gap between cotton production and demand in the year, insufficient supply of high-quality lint and the convergence of cotton prices at home and abroad, cotton imports will increase.

But the total amount of cotton reserves is still high, and cotton imports will not increase too much.

China's cotton imports in the new year are estimated to be 1 million 100 thousand tons, an increase of 100 thousand tons over the previous year.

In the new year, domestic inventory is ample, cotton reserves are put in and cotton production is increased to ensure the smooth operation of the market. Prices will not fluctuate drastically. The domestic 3128B grade cotton average price interval forecast will remain at 14500~16500 yuan per ton.

This month, cotton imports in China were estimated to be 1 million tons in 2016/17, an increase of 100 thousand tons from last month.

Final inventory fell to 9 million 230 thousand tons, an increase of 100 thousand tons from last month, and other estimates remain unchanged.

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