Market Analysis: Lack Of Confidence In Market Orders, Textile Enterprise Demand Is Not Good To Improve

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Last week, the cotton market center of gravity downward, 10 domestic cotton price index 3128b class average price 21247 yuan / ton, down 133 yuan / ton from the end of last week. After the Dragon Boat Festival, the cotton spot market is still in a weak position, the textile enterprises are not enthusiastic about purchasing raw materials, the price support is limited, and the lint sales progress is slow.

As of June 2, the national lint sales rate was 56.6%, a year-on-year decrease of 41 percentage points, far behind the level of the same period in previous years, and commercial inventory was at a historical high. According to the statistics of Mysteel agricultural products, as of June 3, the amount of commercial cotton in the warehouse was 3.5275 million tons, a decrease of 3.3%, an increase of 18.86% compared with the same period in 2021, and an increase of 10.67% in the same period of 2020. According to the latest news of the Ministry of agriculture and rural areas, considering the large scale of new cotton to be sold, the strong external cotton price and the weak internal price difference, and the weak demand for cotton downstream, the Ministry of agriculture and rural areas lowered the import of cotton by 100000 tons to 2 million tons this month.

The international cotton price is strong. On June 8, the Indian government approved to increase the purchase price of MSP in 2022 / 23, and the medium length was raised to 6080 rupees / kg, up 6.2% year-on-year; The longer length was up 5.9% to 6380 rupees per kilogram. Effective October 1.

On June 9, the price difference between Xinjiang cotton and American cotton was - 3792 yuan / ton, breaking the historical low value, and the price advantage of domestic cotton was more obvious. Last week, the US cotton contract remained strong, and the increase in China's procurement pushed up cotton prices. The July contract of ice cotton futures soared nearly 6 cents, and the settlement price of July contract as of September 9 was 146.51 cents, up 8.77 cents from Monday; December contract 124.93 cents, up 5.13 cents from Monday, 9 ice cotton main shift positions to 12 contracts. On the 9th, the international cotton price index (SM) was 159.33 cents / pound; International cotton price index (m) 157.56 cents / pound.

Last week, the off-season atmosphere of cotton yarn spot market became stronger, the internal and external price difference was obviously inverted, the spinning profit was restored, the market transaction was less than may, the speed of textile enterprises' goods delivery slowed down, and the inventory began to rise again. Due to the scarcity of new orders, textile enterprises are confused about the future market. If the market continues to be flat in July and August, some textile enterprises still have the intention to start down. Cotton prices in India's domestic market are much higher than international prices, so the production costs of Indian mills are still high. India imported cotton yarn for the first time this year to ensure domestic supply as it is about 30 rupees / kg cheaper than local yarn.

The recent rise in cotton prices and viscose prices, however, makes the cotton price rise in general. Grey fabric end market continued to go weak, weaving mills for June orders lack of confidence. Textile demand side no good improvement, expected short-term cotton yarn market will remain weak finishing, pay attention to downstream orders.