Market Expectations: Short Term Textile Market Sentiment Generally Turns Pessimistic

As for the international cotton market, as of December 3, the seed cotton listing in Sindh province of Pakistan was basically completed, and the national new cotton listing volume increased by 54.22% compared with the same period last year. Lint prices in Sindh, Punjab and Balochistan fell 13% from their previous highs. Indian Flower Association said that with the increase in the number of new cotton listed, India's domestic seed cotton prices will fall from the peak. Last week, the US cotton shipment remained at a low level of 28000 tons, up 68% month on month and 41% lower than the same period last year.

In the international textile market, American ships are running slowly, and there are a large number of stores out of stock. American economists point out that the Christmas shopping season will be very cold this year. The average waiting time of U.S. ships increased by nearly one week to 20.8 days as of last Friday compared with November, according to relevant agency data; Total online consumption on November 29, the main online shopping day in the United States, fell 1.4% year-on-year, the first time consumption slowed down since the agency made statistics. In the short term, under the joint effect of repeated interference of overseas epidemic situation and weakening of consumption power, the downward pressure of cotton market is increasing.

Domestic cotton upstream and downstream is still in deadlock, market sentiment turns pessimistic. The people's Bank of China announced a 0.5 percentage point cut in the deposit reserve ratio of financial institutions from December 15 to support real enterprises and guard against capital market flows. According to the National Bureau of statistics, the month on month growth of the national consumer price index (CPI) slowed down by 0.3 percentage points in November; Industrial producer price index (PPI) rose 2.5% month on month to flat, and the rapid rise in raw material prices was initially curbed.

Domestic cotton market, new cotton market inquiry slightly increased, the number of transactions is still relatively limited, processing enterprises to reduce sales. According to the national cotton market monitoring system, 102000 tons of lint were sold nationwide this week, up 5% month on month; As of December 9, 635000 tons of lint had been sold nationwide, a year-on-year decrease of 1.025 million tons. The downstream textile market is expected to continue to weaken before the Spring Festival. With the accumulation of yarn inventory, the financial flow of textile enterprises is generally tight, domestic and foreign sales orders continue to be weak, and the number of enterprises planning to take holidays ahead of schedule increases.

With the gradual recovery of production in Southeast Asia, China's clothing export momentum slightly weakened. The sudden epidemic situation in Shaoxing, Zhejiang Province affects the demand of industrial chain. On December 9, the United States said it planned to ban the import of China's Xinjiang related products, further undermining market confidence. In the short term, the upstream and downstream of cotton market is still deadlocked, and the pressure of processing enterprises is intensified, and the market sentiment generally turns to pessimism.