Zheng Cotton'S Annual Low Point Appears In The First Half Of 2019.

Since the fourth quarter of 2018, it has been affected by the expected decline in consumption. Zheng cotton futures price has continued to callback, and the lowest 1905 contract has been detected to 14650 yuan / ton, currently fluctuating near 14900 yuan / ton, and the minimum cost of warehouse receipt is between 14600 yuan and 14800 yuan per ton.

The industrial chain is still in a weak position.

At present, the domestic textile and apparel domestic sales have slowed down stage by stage. Combined with the prediction of the overall downtrend of China's GDP growth in 2019, it is estimated that the domestic market situation of domestic textile and apparel in 2019 is generally not good. From 1 to October 2018, the export performance of textile and clothing was better, and it deteriorated in November. Under the influence of Sino US trade friction, the growth rate of China's textile and garment export is facing a risk of coming down in the future. Due to the slowdown in internal and external sales, the inventory of finished products of textile and clothing has been gradually exhausted since July 2018. Cotton inventory reached the highest level since 2009 in mid November 2018, and the storage speed was slow. The stock of spinning cotton yarn is higher, and it is still in the process of selling to stock. Raw material cotton is replenishment or close to completion. Downstream orders have not improved significantly, and the start-up rate is lower than the same period in previous years. On the whole, the cotton industry chain is still in a weak position.

Reserves will be reduced this year.

Since 2016, China's reserve cotton has been stocktaking for three years in a row. The current reserve cotton has reached the safety stock location, while the previous announcement of the reserve cotton delivery announcement issued in November failed in November 2018. At present, the quasi tax quota has been issued and the sliding rate is reduced, which is conducive to promoting imports and thus reducing the supply gap. It is estimated that the cotton reserves will be reduced in 2019, and the storage time will be delayed or delayed.

On the other hand, affected by the contraction of demand, the global supply and demand of cotton will gradually shift from tight to tight in 2018/2019. At present, the domestic supply side presents a lingering situation at the bottom. After three years of substantial inventory clearance, the reserve cotton has reached the safe stock location and slowed down to the storehouse. In terms of demand, domestic cotton consumption has been rising for three consecutive years, and 2018/2019 has become a year of consumption decline.

It is possible to purchase American cotton in China.

One of the Sino US trade negotiation agreements is China's purchase of US agricultural products. At present, it has purchased soybeans, and if China and US trade frictions are eased, China's purchase scope is expected to expand, and cotton is likely to be listed. Cotton prices in the United States are in a relatively low stage, and the cost is relatively controllable. According to the requirements of the national development and Reform Commission's Document No. ninth in 2016, the volume of round trips should not exceed 30% of the actual number of actual rounds in the previous year, and the estimated upper limit will be about 800 thousand tons. As of December 13, 2018, the US cotton contract reached 72.3% in 2018/2019, and the remaining amount was limited. If China entered the US cotton market, it would be more likely to purchase 2019/2020 cotton in the United States.

In short, the domestic cotton market was weak in 2019, and the marginal negative impact of the economic slowdown is expected to be more significant in the first half of 2019.