Weekly Market Observation (July 27 - August 2, 2020)

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Cotton: in that week, political risks intensified. Affected by weather factors and the rise of US stock market, cotton futures in New York picked up, driving up spot prices, but from the overall average price, it was still lower than the previous week. On the domestic side, the confirmed cases of Xinguan pneumonia in Xinjiang are still continuing. The recovery of downstream market is not as expected, and the market confidence is slightly insufficient. The futures price of Zhengzhou cotton falls, and the spot price rises slightly. Some cotton textile enterprises just need to replenish the warehouse, the spot transaction is better than the previous week.

Chemical fiber staple fiber: in the current week, the price of viscose staple fiber maintained at the previous weekend, and the price remained at 8300 yuan / T within the week, which was relatively stable. At present, cotton spinning enterprises are still mainly to digest inventory, with reduced procurement and few new orders from viscose factories. In terms of polyester staple fiber, the upstream polyester market is mainly shock finishing, while the downstream demand is still weak. The price of polyester staple fiber remains at a relatively stable level, and the overall average price of the week is higher than that of the previous week.

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Cotton yarn: in that week, the market is still light, conventional yarn is better than high count yarn, and some high count yarn enterprises have reduced production. At present, the price of cotton yarn is at a historical low level, and cotton spinning enterprises are basically in a state of zero profit or loss except for cotton cost and labor cost. But companies are sticking to it, selling with price. Recently, the epidemic situation in Xinjiang has rebounded. Due to the epidemic prevention and control, yarn sales in Xinjiang are hindered, and cotton spinning enterprises have certain business pressure. On the other hand, the price of cotton yarn is reduced. The price of cotton yarn per week is lower than that of domestic cotton yarn, which is lower than that of domestic cotton yarn.

Grey cloth: in that week, grey cloth market order situation is not optimistic, price competition is fierce. The current start-up situation of the weaving mill is acceptable, and the starting rate is between 40% and 50%. Although the downstream inquiry slightly increased, but the overall shortage of follow-up orders, therefore, cotton yarn procurement in weaving mills is less, and the phenomenon of price reduction is common. Export orders are still mainly inquiry and development lofting, the overall recovery is slow, and the textile factory inventory continues to accumulate.

Future prospects

With the intensification of Sino US relations, the continuous spread of international epidemic situation, and the strengthening of unstable factors in the global economic recovery, the situation of global cotton supply exceeding demand is expected to be difficult to change in a short period of time, and it is difficult for cotton prices to rise. In August, the overall improvement of the downstream market is not obvious, and the gauze price remains weak and the downward probability is large