Market Dynamics: Off Season Is Not Weak, Cotton Market In June Fluctuates And Rises

1、 Price quotation

In June, cotton market experienced the first rise and then fall, and then rose again in the second half of the month. On the 1st day, the price of 3128b lint was about 15791 yuan / ton, and that on the 30th day was 16159 yuan / ton, up 2.33% and 35.86% year-on-year.

2、 Market analysis

Domestic: China's cotton price index 3128b rose, with 15780 yuan / ton at the beginning of the month and 16097 yuan / ton at the end of the month, up 317 yuan / ton or about 2%. The settlement price of Zhengzhou cotton main contract on the first day was 15470 yuan / ton, and the settlement price of 30 yuan / ton was 16020 yuan / ton, up 550 yuan / ton or about 3.56%. In the middle of the month, the domestic policy of ensuring supply and price stability was continuously introduced, which promoted the reasonable formation of commodity market price. The domestic spot price of cotton changed from up to down, and the domestic cotton yarn price turned to a small decline. To the second half of the month, Zheng cotton futures market rose, cotton spot with the rise.

According to customs statistics, in May 2021, China imported 170000 tons of cotton, a decrease of 60000 tons on a month on month basis, a decrease of 26%, and a year-on-year increase of 100000 tons, more than doubling. In May, China imported 168700 tons of cotton yarn, a month on month decrease of 27.12% and a year-on-year increase of 66.24%; Export cotton yarn 24800 tons, down 8.95% month on month, up 66.44% year on year; The net import volume was 144000 tons, down 29.54% month on month and increased by 66.21% year on year.

International: supported by the US $6 trillion stimulus package, the international cotton price showed a significant rebound. International cotton price index rose, ice futures also rose. The United States Department of Agriculture released the global cotton supply and demand forecast monthly report in the middle of the month. In 2021 / 22, the global ending inventory will be reduced by 370600 tons to 19443000 tons. The output and consumption data of 2021 / 22 are the same as that of the previous month. With the decrease of inventory at the beginning of the period and the increase of export volume, the ending inventory is now reduced by 43600 tons to 631000 tons. Stimulated by data, international cotton prices continue to rise.

In January, the US Federal Reserve raised interest rates, US stocks fell in response to the call, the international cotton futures price fell, and the spot price fell significantly. The following week, the US Federal Reserve eased its interest rate hike speech, and the market's cautious mood eased, pushing the U.S. stock market to a record high, adding to the hurricane rain weather in the US cotton area, supporting the rise of international cotton prices.

3、 Downstream industry chain

Summer is the traditional textile off-season, although the textile market began to enter the traditional off-season, but the overall sales are relatively smooth, and there is no significant accumulation of yarn mills. The rise of Zhengzhou cotton and cotton yarn futures and the low inventory of yarn mills support the continuous stability of yarn prices, and textile enterprises maintain a high operating rate. Due to the shortage of new orders in the cotton yarn market, the transaction price of some imported yarns has risen due to the shortage of overseas freight. In the downstream grey fabric market, the actual transaction is less, mainly in small batch or turnover order. Cotton prices rise, the willingness of downstream replenishment is not high, textile mills maintain the position of rigid demand procurement, and the market is expected to be stable in the short term.