Before The Spring Festival, There Is No Obvious Improvement In Zhengzhou Cotton Market.

Since the beginning of this year, Zheng cotton has been shaking down under the dual pressure of shrinking demand and concentrated supply of new cotton.

Near the Spring Festival, downstream enterprises began to take a vacation, and the operating rate kept low; Sino US trade frictions were still uncertain, spot trading was slack, and sales of new cotton were slow.

Cotton spinning PMI hit a new low in 33 months

After the Sino US trade friction was upgraded in September 2018, the market has always been pessimistic about the downstream demand of cotton.

At that time, it was the ten peak season for gold and silver nine. However, due to trade friction, the downstream started and the goods were lighter.

Data statistics show that in mid and late 2018 9, the yarn and grey fabric operating rate gradually decreased, while inventory slowly climbed.

The purchasing managers' index of cotton textile industry reflects the same problem.

In November 2018, cotton textile industry PMI was 41.74, hitting a new low in the past 33 months, and the index has declined for 4 consecutive months.

The index of start-up rate is slightly better than that of summer, but it is still at a low level since March 2017. Yarn inventory index is at its highest level in nearly 15 months.

Near the Spring Festival, the purchasing power of cotton enterprises is not high, and the cotton inventory index is only 38.28, a record low of nearly 49 months.

Slow progress of new cotton sales

National Bureau of statistics data show that in 2018, domestic cotton output increased by 440 thousand tons over the same period.

According to relevant data, domestic cotton business inventories increased by 620 thousand tons year-on-year at the end of August 2018, and in September, the output of cotton reserves decreased by 180 thousand tons compared with that of the previous year. In the early year of the year, the supply of circulating cotton increased by 440 thousand tons compared with the same period last year.

As a result, cotton supply increased by 880 thousand tons over the same period last year.

In terms of consumption, because of Sino US trade friction, the market expects lower demand for cotton downstream.

Under the combined action of multiple factors, the sales progress of new cotton has further slowed down.

As of January 4th, the national cotton sales rate was 26.2%, down 6.8 percentage points year-on-year, and the decline was eighth weeks in a row.

Among them, the sales rate in Xinjiang was only 23.9%, 32.5% in the same period in 2018, and 40.7% in the past 4 years.

Zhengmian warehouse receipt began to increase in November 2018 after a brief fall in the beginning of the year.

As of January 4th, zhengcotton warehouse receipt 15080, the highest value for cotton futures since listing, nearly 2 times that of 2008.

Spot sales are slow, and there is much uncertainty in the future. In addition to the convenience of Xinjiang library, the registration of cotton warehouse receipts is undoubtedly a good way to protect and sell.

There are no large quantities of dumping storage conditions in China.

After 2016-2018 years' inventory, the stock of cotton in the national reservoir is about 2 million 700 thousand tons.

At the same time, due to the existence of domestic supply gap, the increase of cotton imports is unavoidable.

In June 2018, 800 thousand tons of import quotas had been issued; at the end of 2018, the Ministry of Finance announced that it would appropriately reduce the sliding tax rate of cotton imports.

On the one hand, the stock of the state reserves falls to the safety line, and on the other hand, the import volume increases. In terms of reserves or demand, reserve cotton does not have a large number of conditions.

There has been no news on the announcement of the reserve cotton rotation issued in November.

Near the Spring Festival, most textile enterprises leave in advance, while the downstream enterprises mainly focus on small orders, while cotton enterprises have the demand for hoarding goods, but with the weak demand from the downstream, the enthusiasm for purchasing is not high, and the wait-and-see sentiment is strong.

The central bank's approval and the office of the United States trade representative approved the first round of applications for exemption from import tariffs to boost cotton prices. Zheng cotton was expected to get warmer after the bottom, but was constrained by fundamentals.