Zheng Cotton'S Three Major Reasons For The Collapse Are Still Pressure On The Cotton Market To Go Up.

In May 13th, Zheng cotton's main contract CF1909 plummeted after the opening of early trading. It was sealed in the limit after more than 10 minutes. The night disk continued to end after the expansion, and on the 14 day, it was closed at the 13820 yuan / ton position at the time limit. It dropped to 1045 yuan / ton on that day.

Zheng cotton for two consecutive days down limit let the industry a bit unprepared, at present, the price of cotton futures has fallen far below the lint processing cost line.

Whether it is lint processing enterprises, or cotton distributors and downstream textile enterprises, the futures oversold are unexpected.

14 day and night, Zheng cotton fell, investors are more concerned, is there a chance to copy the bottom now?

Clarify the reasons for this fall or help us make reasonable decisions.

First, the price of this round of cotton fell sharply. The fuse was that the United States raised its tariffs on China's $200 billion commodity to 25% in May 10th. China's attitude was firm and had to be counteracted.

In addition, after ten rounds of trade consultations between China and the United States, both China and the United States are generally expected to reach a trade agreement at home and abroad, but in the key node, Trump tweet is dissatisfied with the negotiations, and the eleventh round of consultations eventually failed to reach an agreement.

The domestic and foreign markets are expected to turn to "Hope" and turn into a great psychological gap of disappointment, or the key to the excessive pessimism of the cotton market.

However, the amount of cotton used to export textile and garment products from China is converted to $200 billion, and the amount of cotton used in the list of Chinese commodities is roughly 100 thousand tons.

Therefore, in view of this, the actual impact is not large, but the uncertainty of macroeconomic risks has caused a significant blow to the mentality of the businessmen.

Second, since the outbreak of the trade war, the downstream textile enterprises have been cautious, purchasing raw cotton and adhering to the strategy of buying and selling.

Therefore, this year's "gold three silver four" textile peak season market performance is not as expected.

Lack of downstream demand led to slow progress in spot purchase and sale, and cotton stocks in main production area of Xinjiang were still in the same period.

Since the Spring Festival, due to the rapid expansion of cotton prices between home and abroad, cotton accounts for some market share. According to the national cotton market monitoring system, in September 2018 -2019 March, China's cotton imports reached 1 million 256 thousand and 100 tons, an increase of 569 thousand tons year-on-year, representing an increase of 82.9% over the same period last year.

According to the investigation of some textile factories in Shandong and Henan, the enterprises reduce the domestic cotton consumption by increasing the ratio of imported cotton with high cost performance, and some enterprises reduce the cost by purchasing the spot price.

With the textile season off, textile enterprises demand or further weaken, some export enterprises gradually pfer the industry to foreign production, so that the cotton textile industry is doubtful about the future demand.

Third, the issuance of 800 thousand tons of imported cotton quasi tax quotas and the dumping and storage policy in April will be delayed.

Since May 5th, the 100% turnover rate has been broken in yesterday's (May 14th), and finally ended in 76.46% turnover. It also reflected some tightening of the mentality of some textile enterprises.

The application of quasi tax quota will be closed on the 19 th of this month. It is estimated that the probability will be greater in June.

However, the specific use of the domestic and foreign cotton prices still need to pay attention.

On the whole, Sino US trade negotiations have become the key influencing factors. Recently, the United States has continued to visit Beijing, and the United States has also indicated that it will work together to promote peace talks.

But from a fundamental point of view, there is still pressure on the cotton market to go up.

Therefore, investors are advised to operate cautiously and pay close attention to relevant news.