Sino US Mutual Tariff, Zheng Cotton Continuous Limit Cotton Market People How To See

In May 13th, after the Sino US trade negotiations ended with mutual tariffs, the market faced dramatic changes. Most commodity groups plunged, especially in zhengmian. After two successive stops, the price of CF1909 contracts fell to 13820 yuan / ton from 15300 yuan / ton, and the change of the market exceeded the expectation of the market.

To this end, China cotton net reporter interviewed the industry professionals on the trend of Zheng cotton and other related issues.

At present, the US side only adds tariffs to the Chinese $200 billion commodity. The Chinese side has also chosen to raise tariffs to fight back. The trade war is still in the first stage. If the follow-up US side adds tariffs to China's $325 billion commodity, how much will it affect?

Yang Zhijie, a senior cotton professional, said that if the United States would impose a 25% tariff on all goods exported to the United States, it would affect China's balance of payments to a large extent, which is very important.

It will also have a greater impact on the future export industry, and will have a long-term impact (the pfer of industrial chain).

Tang Zhen, general manager of Dezhou Business Department of Lu Xian Futures Co., believes that if the US side adds tariffs to all China's exports to the US, it will definitely have a bigger impact on consumption. This effect will be slowly digested through the market. The trend of the market is more market drain, and the fall process is too fast.

From a fundamental point of view, does the trend of the market reflect the fundamentals of supply and demand at this stage?

Yang Zhijie said that from the current CF1909 contract price, the intensity of the continued rapid downward will gradually reduce, and the process of falling will start to appear concussion and repetition, but the bottom finding process needs precipitation for a period of time.

From the basic point of view, the supply situation has not changed: 3 million 800 thousand tons (April commercial inventory) +100 million tons (reserve cotton rotation) +100 million tons (imported cotton) =580 million tons.

From now until the end of October, the average monthly supply is 580/6=96 million tons in 6 months, so there is no so-called gap in cotton resources, and the uncertainty of future demand side (the United States can raise taxes on the remaining 325 billion US dollars) will further restrict the industrial chain's willingness to purchase cotton resources.

In view of the future price trend, Tang Zhen believes that from the present fundamentals, supply is certainly surplus. Before the new flower comes into the market, the reserve cotton has increased the market supply, and now the trade war has depressed the market's anticipation for future consumption.

Although consumption is not a stable prediction, it will certainly be affected, and is expected to change with the Sino US trade negotiations.

Now is the temporary impasse, whether the latter will move towards a good direction, full of variables.

At the end of the day, Yang Zhijie said that the outcome of the negotiations between the two sides will depend on how well the two sides bear their losses, and the negotiations will continue. However, the US tax increase process will continue, and the negotiations between the two sides will be even more difficult.

In the coming period, the Sino US trade negotiations will be mixed up. The trend of the disk will continue to be tortuous and repeated. There is no absolute high or low point in the market.