Downstream Demand Downturn Zheng Cotton All Line Limit

"If you don't bring a computer automatic stop loss, you will be in trouble."

Lao Zhang, the head of an investment institution in Zhejiang, told the futures Daily reporter that the opening of the morning limit on May 13th morning was too surprising.

"I am regretting that there has been little report on the beginning of the shutdown of some small and medium-sized cotton mills and the related Cotton Conference orders. The sharp drop in cotton and cotton yarn prices has a lot to do with the downturn in the downstream demand, and it is also a concentrated expression of all the bad factors accumulated to a time point in the past 1 months."

Futures Daily reporter told Lao Zhang, the market is generally expected that the demand outlook is not optimistic, such as cotton traders selling inventory awareness.

In May 11th, the fifth futures forum of Yu Jian cotton, sponsored by Yongan futures Zhengzhou business department, was held in Zhengzhou. More than 200 representatives from the upstream and downstream enterprises and investment institutions of the national cotton industry chain attended the meeting. Professionals attending the meeting discussed the industry from the perspective of macro, dumping and storage, and supply and demand of cotton, and many of them were worth seeing.

Wang Peng, a senior analyst at Yongan Futures Research Center, said in a keynote speech on the impact of Sino US trade friction and macro economy on the domestic cotton textile market. Although the US tax increase has limited impact on China's export textile products to the United States, it is more disadvantageous to market confidence and subsequent trade between China and the United States.

Wang Haoyu, manager of Sino Pu Weiye (Beijing) Trade Development Co., Ltd. believes that the core issue of China's cotton and cotton textile market is that the raw materials end is facing double price differences, the environment of the front and rear ends of the industry is quite different, and the external dependence of the industry is still quite high.

Qi Lei, director of Investment Department of textile department of Henan Yi an Supply Chain Management Co., Ltd., believes that the medium and long term strategy should be to buy imported cotton throwing Zheng cotton 2001 contract. At present, domestic and foreign cotton market spreads and inventory are at a high level, which is manifested in the difference between inside and outside cotton price, the difference between internal and external yarn, and the price of substitute products.

He believes that the price gap between domestic and foreign markets may continue for a longer period of time. On the one hand, there are gaps in the domestic market. On the other hand, reserves are already at a low level. The future price differentials are conditional on the issuance of quotas, the import of imported cotton, and the new domestic cotton market.

Another reporter has learned that since May, due to continuous decline in processing profits, small and medium-sized textile enterprises such as Shandong, Hebei and other parts of the small and medium-sized textile enterprises have cut down the start-up rate. Individual enterprises have been shut down. Some enterprises have not informed workers to work after May 1 holiday.

Shanghai Yu an company chairman Yang Yong told reporters that from some cotton related yarn and clothing conference order analysis, the current market is too cold, not only fewer participants, and fewer orders, many factors that are not conducive to long-term stable development of the market are intertwined, making it difficult for everyone to feel secure. Investors who have larger cotton resources have stronger desire to sell, which may be one of the main reasons for the sharp decline of cotton today.