The Differences Between The Two Sides Increased The Risk Of Zheng Cotton Catching Up.

At present, Sino US trade negotiations have made good progress, supporting the market to do more sentimental things, and Zheng cotton's breakthrough. However, considering that the current situation of high inventory and high inventory in the domestic market is limited, the situation of the downstream heating is limited. We believe that the short-term market is more capital behavior under the condition of emotional improvement. In the later stage, Zheng cotton will still change the space with time and gradually digest the inventory before it can go further. Operation, the short line is not recommended to catch up, to guard against the risk of callback.

Sino US trade negotiations progressing smoothly

In December 13, 2019, the long-awaited Sino US economic and trade consultations finally made progress. China's statement on the first stage economic and trade agreement between China and the United States shows that, thanks to the joint efforts of the economic and trade teams of China and the United States, the two sides have reached an agreement on the first stage economic and trade agreement between China and the United States on the basis of equality and mutual respect. The smooth progress of Sino US trade negotiations has made market sentiment better. Recently, with the rise of cotton prices, the replenishment of textile enterprises has increased. A sample survey of the national cotton market monitoring system showed that as of the beginning of January, the average number of cotton stocks used by the enterprises surveyed was about 31.9 days (including the quantity of cotton imported to Hong Kong), an increase of 4.5 days, a decrease of 8.4 days compared with the same period last year. Projections of the national cotton industry inventory of about 663 thousand tons, an increase of 16.2%, an increase of 25.6% over the same period last year.

At the same time, the downstream purchase and sale situation has improved. At the beginning of January, the yarn production and sales rate of the enterprises surveyed was 98.6%, up 0.4 percentage points, up 6 percentage points from the same period last year, and the inventory was 19.8 days sales, a decrease of 3.4 days compared with the same period. The production and sale rate of cloth is 94.7%, the ratio of ring to market is increased by 4.4 percentage points, which is 2.2 percentage points lower than that of the same period of last year. The inventory is 43.6 days sales, and the reduction is 6.4 days, up 11.4 days compared with the same period last year.

Textile enterprises profit is at a low level.

Statistics show that from 2019 to November, the total export volume of textiles and clothing in China was 246 billion 882 million 300 thousand US dollars, down 2.79% from the same period last year, of which the total export volume of textiles was 109 billion 263 million 100 thousand US dollars, down 0.03% from the same period last year. The total export volume of garments was 137 billion 619 million 200 thousand US dollars, down 4.87% from the same period last year. And cotton prices continue to rise in recent years, the formation of the current linkage situation, in Xinjiang cotton prices, for example, since late December last year, the price rose nearly 700 yuan / ton, but the corresponding price of domestic C32S universal yarn almost unchanged. The theoretical profit of textile enterprises based on zhengmian disk price has already lost more than 500 yuan / ton, which is at the lowest level in recent years. At the same time, the price change of grey cloth is still not obvious, and the polyester staple fiber is limited due to the weak year-end demand.

The gap between the two sides increased.

Since last year, the number of warehouse receipts has continued to increase. As of January 13th, Zheng cotton registered warehouse receipts exceeded 30 thousand copies, effectively predicting over 7500 warehouse receipts, and the total number of warehouse receipts has exceeded 1 million 640 thousand tons, representing an increase of more than 1 million 200 thousand tons over the beginning of October. In addition, last November commercial inventories were close to 4 million 500 thousand tons, the highest level in the same period of history. Although absolute increment, the inventory increased by about 2 million 290 thousand tons in November compared with September last year, which is smaller than that in the past three years. But under the absolute inventory, the spot spot pressure is too large.

Since December 25th of last year, Zheng cotton has been running a new high for six months, and its capital has continued to enter the market. The market is constantly breaking through the key pressure level. In this case, the market is becoming more and more popular. In the long run, the state reserve stock is less than 2 million tons, and every year it faces nearly 2 million 500 thousand tons of domestic production and marketing gap. It needs a large number of imports to supplement domestic supply, and the domestic cotton market is expected to support the global cotton price. But taking into account the current situation of high inventory and high warehouse receipts in the domestic market, the situation of the downstream warming is limited. We believe that the short-term market is more capital behavior under emotional improvement. With the continuous flow of disk capital and the continuous increase of warehouse receipts, the differences between the two sides are still increasing, and the short term is not recommended to catch up.