The Low Price Of Cotton Is Still Refreshing, Down 3.20% From The End Of 4.

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According to the business statistics, the average price of the domestic lint spot market was 11320 yuan / ton as of March 24th, down 13.66% from the beginning of the year, down 27.51% from the same month. A new low since March 30, 2016, down 3.20% from the lowest level in 2016, is the lowest price since the start of 2011. Because of the worldwide outbreak of public health events, the upgrading of multinational protection measures, the blockade of borders, ports and so on, the cotton market has a strong sense of empty air. Because cotton prices have fallen too fast, textile mills have seen more and less procurement.

In March 24th, the 2005 contract of zhengmian main contract closed at 10360 yuan / ton, down 2.08% from the previous trading day, and the lowest price was 9935 yuan / ton. Compared with the beginning of March, it fell by 2030 yuan / ton, or 16.38%.

On the macro side, in March 23rd, Georgi Ieva, President of the International Monetary Fund (IMF), predicted that the global economy would plunge into negative growth in 2020, which was at least as severe as the 2008 financial crisis, or even more serious, and expected to recover in 2021. The crisis of textile supply chain has developed to a global scale, and the price of foreign yarn has dropped, which indicates that inventory digestion is difficult. On the other hand, the upgrading of multinational protection measures, as a domestic textile mill, is concerned that the government may ask enterprises to shut down and stop production. The suspension of production will be a fatal blow to the local textile industry, and orders will be forced to break the contract.

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In March 22nd, China Cotton Reserve Management Limited announced that the purchase and storage work was suspended again due to the difference between domestic and foreign cotton prices, which had exceeded 800 yuan / ton for three consecutive working days. This is the second suspension of New Territories cotton rotation in March. Foreign cotton prices have fallen too fast, but the domestic cotton yarn enterprises are still watching, prices are strong, and the spot cost of domestic lint is higher than that of imported cotton. The decline is more conservative and prudent. After triggering the suspension mechanism, cotton price trend is basically the same. Zheng cotton and stock market have substantially reduced. Zheng cotton once fell below the ten thousand mark and rebounded.

Cotton prices fell to a new low and cotton pricing became chaotic. According to the monitoring of business data, the price of yarn in Shandong is stable, but the market has little reference value. What the market is facing now is not quotations but transactions. The decline of raw material cliffs has left no way to deal with the cotton mill. The yarn can not be sold. The pressure brought by the high priced raw materials can not be digested. Some enterprises have lowered the quoted price, and the decline has been widening, but it has not reached the effect of stimulating the downstream purchase. Some enterprises simply do not adjust prices, because the market demand is not good, prices are not ordered, and do not know where the market expectations are. It is expected that the price of yarn will go down and the bottom of the price will appear when the market is active.

Business analysts believe that the market is always watching the impact of the epidemic on the market. Cotton prices continue to decline, the domestic cotton mill delisting wait and see, not much turnover forced cotton prices further lowered, 2020 will witness the birth of a new low.