ICE Cotton Futures Slump Traders Refused To Lower Prices

According to feedback from Cotton Traders in Qingdao, Zhangjiagang and other places, although ICE cotton futures approached strong support positions of 60 cents / pounds, and began to suspend New Zealand's cotton trading in March 2nd, but the price of export quotas for port customs clearance was very low. The price difference of Brazil, India cotton and West Africa cotton was not only significantly higher than that of Xinjiang cotton in 2019/20, but also the bargaining space was only 30-50 yuan / ton for new customers. Or a single purchase of less than 5 counters firm offer almost no profit.

In March 2nd, Qingdao port M 36 (strong 28GPT) Brazil cotton and 18/19 SM 1-1/8 West Africa cotton (Benin, Mali, Burkina Faso) net quoted price respectively were 13300-13400 yuan / ton, 13300-13350 yuan / ton, higher than Henan, Shandong and so on inland bank 3128B Xinjiang machine picked cotton 300-500 yuan / ton, the price difference expanded 100-200 yuan / ton compared with last week. Several cotton enterprises reflect that Brazil cotton has hardly shipped since late February, and the port continues to be cool after the holidays.

Why do traders refuse to slash prices? Industry analysis has the following points: first, the signing price of imports is high in 12/1 months, when the losses generated by sales are unbearable; two, the downstream cotton textile enterprises are slow to resume production and production, and logistics, transportation, warehouses and so on are in a state of gradual recovery. The strategy of changing sales through price reduction is hard to achieve; three is affected by the global outbreak of the new crown pneumonia epidemic, it is estimated that shipment and arrivals will be made in 2-4 months. There will be a significant decline in the number of foreign cotton delivered and warehousing, and port pressure will slow down. Four, with the massive liquidity released by the central bank in 1 and February, cotton traders will have relatively sufficient capital flow, and short-term repayment and financing pressure will not be great. Five, there will be a strong prediction of China's cotton consumption rebate after the end of the epidemic, and expect the two quarter market demand to return to full swing. Warm flowers.