Semi Annual Report Of Cotton Market In 2020: There Are Many Dangers And Thorns On The Way

two thousand and twenty In the first half of the year, there was a short-term sharp rise in cotton, but also a sharp drop in the impact of the lowest level in history; there was a boost to the market by the purchase and storage of cotton, and there was also the suppression of the market by the rumor of abandoning storage. The outbreak of domestic epidemic situation, the outbreak of peripheral epidemic situation and the instability of trade relations add more difficulties and risks to the cotton market.

Part I: summary

chart one

Cotton market before the Spring Festival has a wave of obvious rise, the main contract to the highest fourteen thousand four hundred and fifty element / The main contract of zhengmian fell sharply on the first day of opening after the festival, and the lowest was to twelve thousand one hundred and thirty element / Tons, down from the peak before the festival 16.06% With the gradual control and stability of the domestic epidemic situation, the spot market price of cotton returned to thirteen thousand element / More than tons. But not for long, two The outbreak of the peripheral epidemic in the late middle of the year, based on the worries about global trade and the fear of the spread of the epidemic, the US crude oil fell to the lowest negative value, and the main cotton futures fell to the lowest nine thousand eight hundred and ninety Point position, distance two thousand and sixteen year three The historical low point of the month is only poor forty-five Spot trading price fell to eleven thousand element / Tons up and down. follow-up three More than months of time, the cotton market opened a long way to return to value.

Under the influence of the epidemic situation, supply and demand changed from near balance to over supply

chart two

Before the Spring Festival, without the influence of epidemic situation, Longzhong information calculation 2019/20 China's cotton warehouse sales ratio in 63.59% Affected by the epidemic situation, the total demand for the whole year will be reduced one hundred and four As a result, the inventory consumption ratio increased to 77.22% 。 The most substantial impact of the epidemic on the cotton market is to change the balance of supply and demand of cotton in China this year.

chart three

If we talk about the harm caused by the market slump, the ginning plant will bear the brunt. According to the start-up situation of cotton processing enterprises, most flower factories in Northern Xinjiang have fast processing progress, and even completed cotton sales before the Spring Festival, so the processing profit is limited by the market slump; about 20% of seed cotton in southern Xinjiang is completed after the Spring Festival, so the enterprises with slow progress have obvious losses, with losses per ton of seed cotton 1000-2000 element / Tons or even higher. The real estate cotton processing enterprises were most affected by the market slump. On the eve of the Spring Festival, most of the flower factories in the mainland were optimistic about the market after the new year. In addition, the stock market rose sharply before the festival. The Longzhong information monitoring market showed that before the Spring Festival, Shandong, Hebei and other places in the mainland were scrambling for seed cotton, and the highest price in Shandong reached three point four zero element / Jin, the highest in Hebei Province three point three zero element / Jin. After the year, affected by the lint slump, seed cotton prices only converted 2.90-3.0 element / Jin, down in 11.76% 。 Due to the high cost and limited market rebound, lint inventory of real estate cotton processing enterprises is difficult to sell, which brings losses and capital pressure to enterprises.

Figure 4

In addition, the import price of cotton in Xinjiang is not high, and the price of imported cotton is not high in the first half of this year. In the first half of the year five Import cotton trade in the month was better, inventory decreased slightly, but did not change the pattern of high inventory. From the inventory quantity, to the middle of the year, the total domestic import cotton inventory in 58-60 Million tons. Qingdao and Zhangjiagang are dominant, accounting for about 80% Other areas are more scattered. In terms of inventory structure, American cotton and Brazilian cotton are dominant, followed by Indian cotton, Australian cotton and West African cotton.

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Figure 5

Figure 6

According to Longzhong monitoring data, domestic cotton industrial and commercial inventory is in a downward trend in 2020, but the consumption is relatively slow. By the end of May, the domestic cotton commercial inventory level had dropped to less than 4 million tons; the cotton industrial inventory level remained at about 680000 tons, less than 700000 tons for two consecutive months. In the first quarter of this year, the domestic lint processing has come to an end. At the same time, the epidemic resistance has achieved great success. The domestic economy has entered the recovery stage. The national enterprises have entered the fast track of returning to work and production. The start-up load of downstream textile enterprises has gradually increased, driving the increase of cotton demand. In addition, with the gradual lifting of the epidemic blockade restrictions in overseas countries, the status of foreign trade orders has improved, and the domestic cotton inventory level has gradually decreased.

Figure 7

According to customs statistics, China will import 800000 tons of cotton in 2020, a year-on-year decrease of 22%. Since the year of 2019 / 20 (from September 2019 to may 2020), the cumulative import of cotton is 1.215 million tons, with a year-on-year decrease of 25%.

? On the demand side, it is hard to say that the good news is hard to say, and the impact of the epidemic situation is irreversible

Figure 8

In the first half of the year, the national yarn industry started showing a wave trend. Under the influence of the epidemic situation, in addition to the enterprises providing anti epidemic raw materials, the national yarn enterprises from two month ten However, considering the severe situation of the epidemic situation and the situation of workers returning to work, some enterprises in some areas went to work three It was only in January that it resumed operation. With the support of early contract orders, the yarn industry started to climb all the way to 70% However, it did not last long. With the outbreak of overseas epidemic, the situation of destroying orders was common. The supply pressure of the industry was offset by the sluggish demand. In order to alleviate the dilemma, during the Qingming Festival, may day, busy farming and Dragon Boat Festival, there were enterprises pressing production and decreasing rate. In the environment of insufficient sales, yarn enterprises even stopped once a month. to six At the end of the month, the national yarn production fell to 64.50% Year on year -11.04 Percentage points.

Figure 9

In spite of the fierce competition in clothing industry, consumers are not faced with low investment threshold. stay two thousand and eighteen After the year, the growth rate of domestic clothing and clothing sales slowed down, as well as the decline of clothing and clothing sales. During the year, there was a negative growth in clothing retail sales, 1-5 Monthly clothing retail two thousand eight hundred and eighty-seven point four Billion yuan, year-on-year -25.60% 。

Figure 10

According to Longzhong monitoring data, the actual turnover of Xinjiang reserve cotton was 371560 tons from December 2, 2019 to March 31, 2020. Among them, the actual transaction volume of Xinjiang warehouse is 12480 tons, accounting for 3.36% of the total actual transaction volume; the actual transaction volume of inland warehouse is 359080 tons, accounting for 96.64% of the total actual transaction volume. The turnover rate of Xinjiang reserved cotton was 47.27% based on the total amount of the rotation listing (786000 tons), and 74.31% according to the arrangement of the rotation quantity (500000 tons).

Part 2: Forecast

Longzhong information that the second half of the cotton upward pressure is still large, its own value range 12500-13000 element / Tons, will be a high range of its operation, the premium is not likely to be. On the one hand, the external epidemic situation continued to ferment, and the definite progress of vaccine was limited; on the other hand, China's cotton supply in this year may be limited compared with last year. Even though the planting area of new cotton has declined, the overall growth of cotton in Xinjiang is better than that of last year. At present, the market has the view of improving the yield per unit area, and the demand has been irreversibly damaged. In addition, the fourth quarter has entered a period of frequent outbreaks of influenza. It is still difficult to completely eliminate the new epidemic situation in the world, and it is impossible to rule out the possibility of "resurgence" in China.

From the perspective of supply and demand data, the world is still facing strong supply pressure

Unit: 10000 tons

According to the analysis and forecast of global supply and demand, the global cotton demand is relatively high 18/19 Annual decrease three hundred and eighty-two Ten thousand tons, 2019/20 Annual Treasury consumption ratio 97.96% , second only to 2014/15 Annual high level. abreast of the times USDA Global cotton production is expected for the new year two thousand five hundred and eighty-eight Ten thousand tons ninety-two 10000 tons; demand adjusted to two thousand four hundred and ninety-four However, the ratio of storage to consumption is still maintained at 91.49% The annual high level. Under the background of supply exceeding demand, it is difficult to say that the price of cotton market will rise.

In the first half of the year, China's economic development experienced a "forced restart" because of the epidemic. For the economy, the epidemic has brought not only a temporary pause in economic development, but also the risk of breaking debt and cash flow in the short term, and the restructuring of the economic structure in the long run. With the restart of China's economy, after experiencing pains, China is gradually entering a new round of recovery cycle. Due to the relatively loose monetary environment provided by the central bank, we have reason to believe that "stable growth" is still on the way, and the epidemic only disrupts the original rhythm and accelerates the elimination of the end of the market. Looking forward to the second half of the year, thanks to the precise control of policy makers, it is expected that China's economy will usher in the road of "new normal" in the repeated outbreaks at home and abroad.

In terms of policy, the expectation and rumor about the market will depress the market before the Dragon Boat Festival. However, we should not rule out the situation that the purchase and storage will be started after the listing of new flowers. Therefore, we should have a positive attitude towards the regulation and control of the cotton market by the state. News from China and the United States needs continuous attention. At present, the United States is troubled by the epidemic situation, and the progress in trade relations may be limited in the second half of the year. In any case, the first half of the year has passed, and the second half of the year is in front of us and "photographed" the cotton man. We still have to pack up and start again.