Sino US Trade And Cotton Textile Market Observation (6.19-7.2)

In late June, domestic and foreign spot market prices showed a state of decline. In July, raw material prices rebounded, and yarn price changes slightly lagged behind.

Review of important news

According to the statistics of National Bureau of statistics, in 2020 1-5, the operating income of textile enterprises above designated size decreased by 17% and profits decreased by 10.3%.

In June 30th, the State Grain and material reserve bureau and the Ministry of Finance issued a notice that in order to optimize the structure of central cotton reserves, ensure good quality and enhance the central reserve control capacity, some central cotton reserves will be rotated. From now on, we will carry out the reserve cotton rotation and arrange the rotation. The rotation time is the national statutory working day from July 1, 2020 to September 30, 2020. The total output is about 500 thousand tons, and a balanced delivery is implemented. In principle, it sells about 8 thousand tons per working day.

In June 22nd, the US side again announced the addition of 4 Chinese media as "foreign missions". In July 1st, as a counteract to the US side's actions, China announced that it requested 4 media from the United States to declare to the Chinese side 7 written materials, including all staff, financial, business and real estate information, in China within the next few days.

Market price dynamics

On June 19th -7 2, the futures market price dropped first and then increased. The news of the rotation of cotton reserves played a greater role in stimulating the market. In July 2nd, the domestic cotton main contract (CF2009) settlement price was 11875 yuan / ton, the cotton yarn main contract (CY2009) settlement price was 19180 yuan / ton; in July 1st, the US cotton futures (ICE2012) main contract settlement price was 60.76 cents / pound. From the domestic spot market, in July 2nd, the domestic 3128B cotton price index was 12235 yuan / ton, the trend of change was in line with the futures market; the price index of 32 pure cotton combed yarn was 18585 yuan / ton, the price was relatively stable, and the rebound strength in the later stage needs to wait and see.

　　 Recently, the Sino US tariff trade has been temporarily relieved. The main focus is on cultural propaganda and political field. Affected by the epidemic, the market continues to slump, the industrial pressure is still larger, the news of cotton rotation has brought a timely rain for the cotton textile industry, but if the price of gauze fails to follow the footsteps of raw materials in time, it will bring more pressure to the cotton textile enterprises.