The Danger Of "Raising Taxes" Will Curb Market Base And Price Pressure.

On Tuesday, Zheng cotton main futures contract CF1909 rebounded slightly, closing price of 13260 yuan / ton, up 280 yuan / ton, or 2.16%, 13200 yuan / ton on the station, shorting is also more obvious.

Zheng cotton rebounded slightly, giving a little confidence to the recent pessimism market. But how can the cold market situation of the industry buy and sell turn around and enter the market in June?

According to the latest statistics of the General Administration of Customs of China, in May 2019, the export volume of textiles and clothing was 23 billion 831 million US dollars, an increase of 22.46%, an increase of 1.65% over the same period last year.

Export figures are good, but why is there no improvement in confidence in the cotton textile industry?

On the whole, the strike of the Sino US trade war on the mentality of the industry continues to spread.

Recently, the spot price of cotton and cotton yarn continues to be explored, and some downstream businesses are shutting down.

It is enough to see that the risk aversion of the industry has gradually increased.

For this situation, the author made a simple survey of market participants.

Since April, there has been a marked decline in the freight rates of highways and railways in Xinjiang. However, the overall sales situation of Xinjiang cotton is not good, and the inventory of the regulatory libraries and futures delivery warehouses is higher than before. Some of the ginning companies have even stopped offering quotations.

A person in charge of a business feedback, now cotton sales is no longer a price problem, the key problem is no demand, downstream products inventory rise, the market is unstable, the buyer is difficult to normal operation.

Therefore, no matter how much the price is adjusted, it is difficult to attract buyer's attention.

Moreover, futures prices fall, and the price of base point prices keeps pulling down prices, which makes tremendous pressure on the sale of fixed price resources.

In just a week, the price of base resources can be reduced by nearly a thousand yuan per ton, and the cotton trade can not be adjusted equally.

At present, the reference price of Xinjiang cotton base resource with a length of 29 and a strength of 26-27 is 13300-13500 yuan / ton, and its competitive advantage is obviously stronger.

Last Friday, the national cotton storage rate fell significantly, although the recent two days have improved, but the overall turnover result is not ideal.

In view of this, the spot market remains weak, and may continue to weaken in the short run.

After the Dragon Boat Festival, the northern region entered the wheat harvest season. Some textile enterprises took the opportunity to stop and take leave.

In order to ease the pressure on stock yarn funds, some enterprises lowered yarn 600-700 yuan / ton after the holiday, but the sales promotion results were still not satisfactory.

Downstream downtime and stoppage will continue to be reduced.

Therefore, the sluggish downstream demand still restricts the rebound of cotton prices.

At the end of June, the G20 summit is coming. People at home and abroad are more concerned about the trend of Sino US leaders' meeting. They expect the meeting to reverse the situation. But the US side said that it would impose tariffs on another 325 billion US dollars, which would involve all exports of textiles, which would cause greater pressure on the current operation of the operators.

Therefore, if the tariff problem is not solved, Cotton Traders' pessimism can hardly be eliminated completely, and cotton prices will rebound sharply or still have difficulties.