Home >

The Short Term Rise Of Bad Cotton Prices Is Difficult.

2019/5/20 13:36:00 12274

??? 日本語 Fran?ais English 中文

Cotton Price Sino US Trade Cotton Spinning Industry Chain

After the May 1 small holiday, China's cotton futures fell sharply due to factors such as Sino US trade friction and poor demand for the cotton textile industry chain. The biggest drop in cotton contract was 1800 yuan / ton, while cotton yarn decreased by about 25000 yuan / ton. However, the spot price of cotton and cotton is not obvious. The 328 cotton price index has dropped 650 yuan / ton. The pick up price of Xinjiang's 328 machine picked cotton has been reduced by 750 yuan / ton, and the C32S yarn price index has fallen by only 200 yuan / ton. At present, domestic cotton and cotton yarn have been repaired after overfall. However, under the condition of sufficient supply of raw materials and weak downstream demand, the repair efforts are not good enough.

US agricultural report negative

According to the US Department of agriculture's May supply and demand report, the world's cotton production and consumption have dropped by about 500 thousand packs this year, and the end inventory has basically remained unchanged. Among them, the reduction in India's production has been offset by the increase in Brazil's output. The US cotton production has decreased marginally, the export forecast has been cut by 250 thousand packages, and the final inventory has increased by 200 thousand packages. In 2019/2020, output and consumption of the world increased significantly, especially the increase in output reached 7 million 20 thousand packs, and the demand for production shifted from the gap in the current year to the basic balance.

In 2019/2020, cotton production in the United States increased year by year. According to the 13 million 800 thousand acres of the intended area, the US cotton production is expected to be 22 million packages, a 20% increase over the previous year; the US domestic cotton consumption is projected to be 3 million 100 thousand packages, and the export volume increased by 15% over the same period; the year-on-year increase in the production volume resulted in an increase in the final inventory to 6 million 400 thousand packages, an increase of 1 million 800 thousand packages compared with the same period last year, and the inventory consumption ratio of 32% was the highest since 2008/2009. In May, the US agricultural report increased the estimated 500 thousand cotton imports in China this year, leading to an increase of 500 thousand packages in the end of the year. In the new year, cotton production is estimated to be the same as this year. The 2 million 500 thousand and 1 million packages were estimated to increase the volume and volume of consumption, respectively. However, due to the sharp reduction of the stock in the initial period, the final inventory estimate was reduced by 2 million 880 thousand bales compared with the current year. The market generally believed that in May, the US agricultural report was optimistic about the consumption volume in the next year, and the possibility of downgrading in the later period.

Textile downstream demand is not good.

According to customs data, the total export volume of textiles and clothing from 1 to April was 75 billion 764 million US dollars, down 3.69% from the same period last year. Among them, the total export volume of textiles was 36 billion 670 million US dollars, an increase of 0.81% over the same period last year, and the total export volume of clothing was 39 billion 90 million US dollars, down 7.56% from the same period last year. In the first 4 months of this year, the export growth rate of goods in China was 5.7% (RMB), while textile exports were higher than the national export growth rate by 0.63 percentage points, but clothing was lower than the national export growth rate by 8.23 percentage points. At the 125th session of the Canton Fair that just concluded, China's total export volume was $29 billion 730 million, down 1.16% from last spring's fair, showing that global economic and trade are slowing down. Against this background, domestic textile and garment exports are under pressure.

According to statistics, textile and clothing sales are also slowing down. In April 2019, the total retail sales of consumer goods totaled 30586 billion yuan, an increase of 7.2% in nominal terms, and 100 billion yuan in total retail sales of textiles and clothing, representing an increase of -1.1% in nominal terms, the only negative value since March 2009. From 1 to April 2019, the total retail sales of consumer goods totaled 128376 billion yuan, an increase of 8% in nominal terms, and 441 billion 800 million yuan in total retail sales of textiles and clothing, representing an increase of 2.2% over the same period.

3 - April is the traditional peak season for textile industry in China. However, it is early in the off-season. From the start of the downstream enterprises, the commencement of yarn and grey fabric began to fall after the Qingming Festival, especially after the fall of Zheng cotton. In the same period, the stock of yarn and grey fabric is increasing, which shows that the product is not running smoothly. According to relevant data, as of last week, the domestic yarn utilization rate was 62.7, down 2.1 percentage points from the end of March, and the utilization rate of grey cloth was 62.4, which was 1.7 percentage points lower than that at the end of March. In the same period, yarn and grey stock increased by 6.5 days and 2.4 days respectively. It is reported that 4 beginning of mid - and late June, some textile enterprises are under pressure of funds and so on, and have begun to sell at a reduced price. Download APP to read more in-depth reports in this article.

3 - April is the traditional peak season for textile industry in China. However, it is early in the off-season. From the start of the downstream enterprises, the commencement of yarn and grey fabric began to fall after the Qingming Festival, especially after the fall of Zheng cotton. In the same period, the stock of yarn and grey fabric is increasing, which shows that the product is not running smoothly. According to relevant data, as of last week, the domestic yarn utilization rate was 62.7, down 2.1 percentage points from the end of March, and the utilization rate of grey cloth was 62.4, which was 1.7 percentage points lower than that at the end of March. In the same period, yarn and grey stock increased by 6.5 days and 2.4 days respectively. It is reported that 4 beginning of mid - and late June, some textile enterprises are under pressure of funds and so on, and have begun to sell at a reduced price.

Throw store volume and price down

As early as the beginning of March, the market had anticipated the reserve cotton rotation. Therefore, the negative effect of the reserve cotton throwing and storage policy has been greatly reduced after the announcement, and there is still a round of expected support. Nevertheless, under the condition of low consumption in the lower reaches of the country, complex international economic situation and abundant supply, there is still a lot of pressure on domestic cotton prices.

Compared with the new cotton, reserve cotton has obvious comparative price advantage, and is favored by spinning enterprises. After the Spring Festival, on the one hand, because of the sufficient raw material resources of the market, on the other hand, enterprises are waiting for the low price cotton reserves to reduce production and raise their books. Therefore, the progress of domestic cotton sales returns again slowly after the Spring Festival. By the end of last week, the national cotton sales rate was 68.5%, down 5.3 percentage points compared with the same period last year, which is 15.3 percentage points lower than that in the past four years. Among them, Xinjiang sold 66.6%, down 9.1 percentage points from the same period last year. Compared with last week, the national cotton sales progress increased by only 0.4 percentage points, and the sales progress in Xinjiang increased by only 0.5 percentage points.

After the domestic and foreign cotton spot prices fell, last week, the reserve price of domestic reserve cotton was lowered by 408 yuan / ton to 14472 yuan / ton. Meanwhile, due to the sharp fall in futures prices, the turnover rate of cotton reserves dropped significantly last Tuesday. In May 17th, 1.1 tons of resources were sold out of the cotton reserves, with a turnover of 6565.9317 tons, with a turnover rate of 59.63%. The average spanaction price was 13293 yuan / ton, down 198 yuan / ton compared with the previous trading day, and the price of 3128 yuan was 14765 yuan / ton, down 101 yuan / ton compared with the previous day. At the same time, from Xinjiang cotton and real estate cotton price increase situation, the decline in the range of 300 - 400 yuan / ton.

To sum up, the downstream consumption of domestic cotton is not good enough, and the pressure of raw material supply is still to be alleviated. Meanwhile, investors should pay close attention to the weather in Xinjiang. New cotton has been sown and sprouting in China, and extreme changes in weather are also likely to cause severe fluctuations in cotton prices.