Market Analysis: Cotton Prices Are Rising Cautiously

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According to the feedback from cotton mills and traders in Henan, Jiangsu and other places, recently, the price of cotton yarn in India and Pakistan has soared simultaneously with that of cotton. The arrival of a small number of orders in spring and summer has stimulated some domestic textile mills and cotton yarn traders to start replenishment before the spring Festival, and the cotton yarn inventory of some textile enterprises has decreased.

At present, the cotton mills with relatively good working capital have first tried to increase the quotation by 300-500 yuan / ton, of which OE yarn has a small increase, high count yarn and combed yarn have a slightly larger increase, while the actual transaction price has increased by 200-300 yuan / ton. Except for some transactions of c40s and C32 conventional yarns, other yarn counts are weak.

A medium-sized textile enterprise in Dezhou, Shandong said that although the main contract of Zhengzhou cotton has risen sharply since December, the cotton yarn quotation obviously can't keep up with the rising cotton price. The profits of textile enterprises continue to decline, and some enterprises above the designated scale gradually consume low-cost raw materials. They have started purchasing new cotton in 2021 / 22, and the spinning cost will also increase significantly.

At present, there are mainly five factors restricting the cotton yarn quotation to rise greatly

First, near the end of the year, weaving, fabrics, clothing and other terminals gradually enter the rhythm of production reduction and holiday. In addition, this year's cotton yarn traders' inventory enthusiasm is not high, and the rise of cotton yarn lacks the support of trading volume;

Second, the cost pressure caused by the sharp rise of cotton and cotton yarn since 2021 / 22 is still not smoothly transmitted to the consumer terminal, and the production and sales of the whole industrial chain continue to hang upside down;

Third, if the cotton yarn quotation is raised in a hurry, it is likely to lead to the transfer of orders in spring and summer and accelerate the flow to Southeast Asian countries;

Fourth, recent foreign trade orders in coastal areas are mainly non Xinjiang cotton, and the domestic demand market has not yet started.

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