Weekly Market Observation (July 6 - July 12, 2020)

Raw material side: domestic and foreign cotton prices maintain a small rise, chemical fiber staple prices continue to decline;

Product side: market off-season continues, gauze sales slightly weak, price maintain weak.

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Cotton: In that week, the market's hope for the successful development of new coronavirus drugs boosted market confidence and cooled the risk aversion sentiment in the market. The U.S. dollar index fell and the commodity market rose strongly. The settlement price of the main contract of New York cotton futures rose by 1.36 cents / pound compared with the previous week. In contrast, the cotook a index rose less, with the weekly average price up 0.71 cents / pound from the previous week. Domestic, Zheng cotton futures continued to rise, higher than 3128 cotton spot price. Reserve cotton transaction is still hot, cotton spot demand is relatively weak, cotton textile enterprises on demand replenishment.

　　 Chemical fiber staple fiber: Viscose staple fiber demand remained flat, market remained weak. Viscose yarn stock decreased to 8700 tons per week. Polyester staple fiber, crude oil, polyester market as a whole warm, but the downstream market remains depressed, polyester short factory inventory accumulation, preferential delivery efforts continue to increase. During the week, the price of 1.4d direct spinning polyester decreased by 125 yuan / ton.

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Cotton yarn: In that week, the overall trading atmosphere of cotton yarn market was still poor. In order to reduce product inventory and maintain operation, some cotton spinning enterprises further reduced their production capacity. Affected by recent heavy rainfall, some cotton spinning enterprises in southern China suffered from disaster. At present, the downstream orders are insufficient, the competition is fierce, and the cotton yarn quotation is chaotic. According to the survey of China Cotton Association, some enterprise owners have certain confidence in the traditional textile peak season of "gold nine silver ten". In terms of imported yarn, Indian cotton yarn and Vietnamese cotton yarn in domestic market remained unchanged in the early stage, but the downstream demand was still weak, the transaction was general, and traders actively shipped. With the decline of domestic cotton yarn price, the price difference between domestic and foreign cotton yarn has further narrowed. In that week, the price of 32 pure cotton combed yarn in India was 180 yuan / ton lower than that of the same cotton yarn in China, while the price of 32 pure cotton combed yarn in Vietnam was 230 yuan / ton lower than that of domestic cotton yarn.

　　 grey: In that week, the gray fabric market still did not improve greatly, the overall order quantity was insufficient, although the inquiry increased, the actual orders were not much, the sales of conventional varieties were low, and the price was stable and weak. Due to the influence of high temperature and rainstorm, textile factories in southern China have more holidays and grey cloth inventory continues to increase. Enterprises expect that the market will recover in August.

Future prospects

On July 10, the U.S. Department of Agriculture released a monthly report, which lowered the U.S. cotton production, export volume and final inventory in 2020 / 21, and 1.9 million bales of global final inventory in 2020 / 21, supporting the rise of international cotton prices in the short term. In the near future, domestic cotton prices will be affected by the domestic cotton prices and cotton prices in some areas will be affected by domestic cotton prices. At present, the downstream market warming signs are not obvious, cotton textile enterprises operating pressure is still large.