Zheng Cotton Unexpectedly Rose To Face The "Big Exam"

In April 8th, Zheng cotton rarely rose. In the context of the global efforts to fight the new crown, the intraday increase is indeed unexpected. There are many reasons for the rise. The market is like this. There is no love without cause or reason. Of course, we should keep sober and take precautions during the boom. We must remain calm and not let go of every opportunity in the fall. There will be some reasons and reasons for Zheng cotton's trading today, but what is the real logic of the rise behind it? It is estimated that not many people will judge accurately, otherwise it will not be just a melon eating crowd.

Supply remains stable and future demand is restored. I believe that from a long period of view, the rise of cotton is certain (only the problem of rising space size). According to the national cotton market monitoring system cotton planting intention data, in 2020, China's cotton planting area was 45 million 501 thousand mu, a decrease of 2 million 442 thousand mu compared with that of the previous year, with a reduction of 5.1%, of which Xinjiang had a cotton planting area of 34 million 759 thousand mu, a decrease of 1.6% over the same period last year. The stability of cotton planting area determines the normal supply. After the new crown epidemic, downstream demand will inevitably drive up cotton prices.

Customer orders are reduced and short term demand is insufficient. From a short period of view, cotton prices are also facing a lot of pressure, because the fundamentals do not support. According to the author's understanding, some large textile enterprises have sufficient inventory for pre preparation, and there will be no procurement requirement before the new ones are down. These orders are mainly for overseas markets, which are affected by the epidemic. Customers are basically postponing new orders, resulting in the company's orders can only be maintained until April. At present, in order to stabilize the workforce, enterprises are full load production, if the subsequent orders can not keep up, the market will continue to deteriorate, and will be forced to take measures to reduce production.

The term "big exam" has been reduced to reduce the output of textile enterprises. Compared with large textile enterprises, the production and operation of small and medium-sized textile enterprises will be even more difficult. In communication with enterprises, we know that before March, enterprises sold at a price, without inventory pressure. After entering April, the production pressure of enterprises gradually increased, and downstream customers did not purchase cotton yarn, resulting in product storage. In addition, the pressure on textile enterprises is greater than that of yarn prices. In the case of lower orders, price reduction has become a helpless solution for enterprises to compete for limited orders. In March, the price of yarn dropped by nearly 1000 yuan per ton in the first month. In the early April, the price of yarn had dropped by several hundred yuan. The drop in speed caused great pressure on enterprises. It is expected that the biggest hurdle will come from 4 to May.