Market Divergence On Current Cotton Price Trend

Today, when crude oil prices hit $30 / barrel, domestic and foreign commodity prices dropped sharply, especially in chemical products. In such a big environment, cotton can not be independent. In the market pessimistic atmosphere intensified and oil prices fell sharply, cotton price drop is also reasonable. There are still differences in the price trend in the future.

It is understood that under the double pressure of global epidemics and oil price drops, the cotton price trend has already been somewhat out of touch with the fundamentals, and the supply and demand data have failed, and the data reflected in the balance sheet have long been digested. Has pessimism reached its lowest point?

According to the author's inquiry, under the double pressure of bad profits, many investors hold the idea of bottoming. Some people think that the performance of cotton is now bottoming out again. The reason is that more and more countries have adopted strict isolation and control measures against the epidemic. The effect of prevention and control is emerging, and the number of confirmed countries is decreasing. At present, there are not many people who have such thoughts. After all, the price of zhengmian has been lower than the actual value of cotton, and cotton prices can not run for a long time below value. In addition, as domestic textile enterprises have resumed work in succession, the demand for raw materials for cotton is also gradually increasing. At this point, the domestic point price will also drive the empty single warehouse, thereby limiting the drop in space.

Of course, a considerable number of people in the market continue to see empty prices. After all, the global epidemic continues to spread and there is no turning point yet. Domestic spun clothing is also an export oriented industry, and the pressure on domestic enterprises to face export is inevitable. Isolation is the most effective way to prevent the spread of epidemics in the absence of effective drugs in the new crown. Isolation will also bring short-term stagnation in traditional commerce, so cotton prices will not improve in the short term. In particular, the main markets for China's export spun apparel are Europe, the United States and Japan, and these countries are also experiencing high incidence. The number of new diagnoses is still increasing.

In addition, there is a view of holding a concussion. They believe that while the domestic epidemic is improving, the epidemic situation is still spreading, and the two markets will be hedged to a certain extent.

Although there are still differences over the recent cotton price trend, most people remain optimistic about cotton prices in the long run.

After all, with the passage of time, the epidemic will eventually pass, and the price of crude oil will eventually reach a new equilibrium after the oil producing countries multiplayer game, and the cotton price will return to the logic dominated by fundamentals in the future.