Market Analysis: Cotton Market Pessimism Is Expected To Continue

In June, China's export of textile and clothing reached US $31.547 billion, up 14.04% year-on-year and 7.94% month on month; Among them, textiles increased by 7.91% year on year and decreased by 3.73% month on month; Clothing increased by 19.10% year-on-year and 18.71% month on month.

According to the survey results, it is estimated as follows: in June, the cotton industry inventory of cotton textile enterprises decreased slightly. Under the background of global liquidity turning and the increasing risk of US economic recession, cotton price also experienced a sharp drop of several thousand points. Although the theoretical profits of textile enterprises were improved after the big drop, there was a strong wait-and-see mood in the downstream, the transaction was light, and the market liquidity was further reduced, which led to the further decline of confidence in the future market and the purchase of raw materials was still maintained.

The inflation of the Federal Reserve has exploded again, causing the market to worry about the tightening of the follow-up interest rate increase policy. July 14 is the U.S. National Day, market pessimism is expected to continue. In addition, there is no obvious improvement in the retail textile industry in summer, which may hinder the recovery of domestic enterprises. At present, the macro background and commodity trend are the leading factors of cotton price. It is suggested to avoid measuring the bottom of cotton price with industrial thinking as far as possible. It is suggested that enterprises hold long double limit or short hedging orders to hedge risks.

In the latest research report, Guodu futures mentioned that, from the fundamental point of view, the global cotton supply and demand pattern is loose, the planting of major cotton production areas in the world has basically ended, and the change range of supply side is limited. In terms of demand, after the rapid decline in cotton prices, although market inquiries have increased and some traders are reluctant to sell, due to the pressure of funds and pessimistic expectations of the future market, some of them still reduce the basis for transactions, while the downstream wait-and-see mood is strong, waiting for the cotton price to stabilize. With the decline of cotton price, the downstream cotton yarn and grey cloth prices are facing adjustment, and the terminal price reduction to the upstream also leads to the low enthusiasm of textile enterprises to start.

In terms of export market, according to foreign media, Bangladesh garment buyers association requires its members to be cautious about purchasing raw materials from Xinjiang. At the moment when the United States expands restrictions on Xinjiang products, the export market is hardly optimistic. Yesterday, 6000 tons of reserved cotton were sold, with an average transaction price of 16286 yuan / ton. On the whole, after the sharp fall in cotton prices, there is a certain stabilizing rebound in demand, and the possibility of continuing to fall sharply is reduced. It is expected that the short-term trend will be dominated by shocks.