August 3 Morning News: Textile Industry Situation Optimistic, Cotton Prices Rose In July

1、 Price quotation

According to business agency data, cotton market rose sharply in July. On the 1st day, the price of 3128b lint was about 16138 yuan / ton, and that on the 31st day was about 17756 yuan / ton, up 10.03%, 43.88% compared with 2020.

2、 Market analysis

Domestic: in terms of spot goods, China's cotton price index rose at 3128b level, with 16091 yuan / ton at the beginning of the month and 17731 yuan / ton at the end of the month, up 1640 yuan / ton or 10.19%. The national cotton inventory decreased month by month. As of June 30, the cotton industrial inventory of textile enterprises was 844600 tons, a decrease of 17800 tons compared with the end of last month; The total commercial inventory of cotton in China was about 3.0173 million tons, down 15.67% month on month. The decline of cotton inventory shows that the operating rate of downstream textile enterprises remains high and the demand for raw materials is large.

The state-owned storage cotton with a total volume of 600000 tons in July began to be sold through competitive bidding on July 5 and planned to end on September 30. By the end of July, the accumulated turnover volume was 191116.7431 tons, with a transaction rate of 100%, and the average transaction price was 16784 yuan / ton. Reserve cotton resources quality and price advantages, for raw material inventory tight enterprises, attract enterprise purchasing enthusiasm, the average price rose sharply. In addition, the cotton import sliding standard tax quota of 700000 tons has also been issued, which is lower than the market's previous expectation of 2 million tons, and it is relatively stable compared with the quota issued in previous years, so the risk of cotton price rising is reduced.

In terms of futures, the settlement price of Zheng Mian's main contract on the first day was 15890 yuan / ton, and the settlement price on the 30th day was 17685 yuan / ton, up 1795 yuan / ton, or about 11.3%. In the middle of the month, the US Department of Agriculture released the global production and demand forecast for July. In 2021 / 22, the global cotton final inventory will be reduced by 1.6 million bales month on month. Global consumption is expected to continue to recover, global cotton inventory consumption ratio continued to decline, so after the release of the report, US cotton closed up, Zheng cotton prices rose in response to this impact.

International: according to USDA's global cotton supply and demand forecast data in July, the total global cotton production in 2021 / 22 will increase on a month on month basis, the consumption will increase significantly, the import and export trade volume will decrease, and the final inventory will drop again. In 2021 / 22, the domestic cotton output was 5.824 million tons, with 2.177 million tons of imports and 600 thousand tons of storage. The total supply of cotton in China was 8.601 million tons, while the current annual total demand predicted by USDA was 8.927 million tons. The pattern of supply less than demand was maintained, and the inventory at the end of the period was expected to decrease.

3、 Downstream industry chain

As of June 2021, China's total retail sales of clothing, shoes, hats, needles and textiles reached 117.4 billion yuan, up 12.8% year-on-year. Benefited from the recovery of market demand, textile enterprises have good orders, spinning profits continue to maintain a good state, business pressure is not big. From January to June, the yarn output was 13.558 million tons, with a year-on-year increase of 17.8%. Under the condition of high spinning profit, the upward support of cotton price was obvious. Due to the gradual increase of orders in autumn and winter, the operating rate of weaving enterprises in the downstream of textile enterprises has increased, and the enterprises are optimistic about the future market and have a large demand for cotton raw materials. But at the same time, under the expectation of the consumption peak season, the market still has worries, and the price of grey cloth has not been able to follow up in this context. The future cotton market mainly depends on the demand side, and it is expected that the cotton price will move forward in a short period of time.