Textile Demand Slightly Improved, Cotton Prices Fluctuated Slightly

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In 2023, the domestic cotton price will rise first and then fall. At the beginning of the year, China's cotton price index (CCIndex3128B) continued the trend at the end of last year and slowly recovered. On January 3, the lowest point of the year was 15050 yuan/ton. With the performance of domestic economic data improving, market expectations strengthening, demand for raw materials rebounding, domestic cotton prices continued to rise, reaching the annual peak of 18433 yuan/ton on September 4, and then affected by the listing of new cotton, macro-control and other factors, cotton prices gradually fell back, with the annual average price of 16767 yuan/ton, down 10.8% year on year.

In December, domestic cotton supply was still loose, and cotton spot prices remained volatile, rebounding slightly at the end of the month. The textile market has slightly improved, the digestion of finished product inventory has accelerated, and the pressure on enterprises' funds has eased. In the middle and last ten days of the year, they purchase a moderate amount of lint on bargain. During the same period, the international cotton price fluctuated due to the expected change of the Federal Reserve's interest rate increase and the US cotton export data and other factors.

1、 Changes in spot prices at home and abroad

（1） Monthly average spot price of domestic cotton fell

In December, China's cotton price index (CCIndex3128B) maintained a volatile trend, with the monthly average price falling from the previous month. The month's acquisition came to an end, the processing volume of new cotton continued to increase, the inventory pressure of cotton enterprises increased, and some enterprises reduced their quotations for sales. Driven by the pre holiday stocking and export orders, the textile mill has accelerated the sales of finished product inventory, but the production profit continues to be poor, and there is still a reserve cotton inventory. The purchase of raw materials is mainly on demand or just need replenishment, and the turnover is improved compared with last month. On December 29, China Cotton Price Index (CCIndex3128B) closed at 16462 yuan/ton, up 129 yuan month on month; The average monthly price is 16278 yuan/ton, down 548 yuan month on month and up 1308 yuan year on year.

（2） Long staple cotton quotation continues to decline

In December, the downstream demand of long staple cotton was depressed, and cotton enterprises continued to reduce their quotations, while cotton enterprises just needed to purchase. At the end of the month, 137 grade long staple cotton was quoted at 31500 yuan/ton, down 450 yuan month on month, 15038 yuan higher than China Cotton Price Index (CCIndex3128B), and the price difference was 279 yuan lower than that at the end of last month. The average monthly transaction price of 137 grade long staple cotton is 31725 yuan/ton, down 525 yuan month on month and up 7475 yuan year on year.

（3） International cotton prices continue to fluctuate

In early December, affected by the strengthening of the Federal Reserve's interest rate cut expectation and the improvement of American cotton sales expectation, ICE cotton stopped falling and rebounded, with the main contract rising to 83.13 cents/pound at the highest; In the middle of the year, the interest rate of the Federal Reserve continued to remain unchanged, putting pressure on the commodity market, with the main contract falling to 78.31 cents/pound as a minimum; In the last ten days, the expectation of the Federal Reserve to cut interest rates in 2014 was strengthened, and the performance of superimposing the contract data of American Cotton was outstanding, driving the main contract to rebound to 81.75 cents/lb. The monthly average settlement price of the main contract of ICE cotton in December was 80.29 cents/pound, up 0.61 cents or 0.8% month on month. China's import cotton price index FCIndexM averaged 91.46 cents per pound in the month, down 0.47 cents month on month; At the end of the month, 91.83 cents/pound, down 0.91 cents month on month. The 1% tariff discount was 16192 yuan/ton, 270 yuan lower than the China Cotton Price Index (CCIndex3128B) in the same period.

（4） Textile inventory digestion accelerated

In December, consumer end enterprises replenished their stocks before the Double Festival. In addition to the increase in export orders, textile demand improved seasonally, market circulation was fast, and the pressure on enterprises' finished product inventory was released. At the same time, the decline in yarn prices has also decreased, mainly due to the easing of capital pressure on traders and the suspension of price cut selling. Specifically, the transaction prices of pure cotton yarn KC32S and combed JC40S at the end of the month were 22380 yuan/ton and 25370 yuan/ton, down 140 yuan and 190 yuan respectively from the end of the previous month; Polyester staple fiber was 7250 yuan/ton at the end of the month, up 50 yuan from the end of the previous month, and viscose staple fiber was 12650 yuan/ton at the end of the month, down 400 yuan from the end of the previous month.

2、 Analysis of factors affecting price changes at home and abroad

（1） The National Bureau of Statistics released the cotton output in 2023

The National Bureau of Statistics issued a notice on the cotton output in 2023 on December 25. The announcement shows that the national cotton planting area is 41.822 million mu, a decrease of 3.183 million mu or 7.1% from 2022. The national cotton output per unit area is 134.3 kg/mu, an increase of 1.5 kg/mu or 1.1% over 2022. The total cotton output in China is 5.618 million tons, 362000 tons less than that in 2022, down 6.1%.

（2） The four departments issued the Implementation Plan for Quality Improvement and Upgrading of Textile Industry (2023-2025)

In December, the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Commerce, the State Administration of Market Supervision and other four departments jointly issued the Implementation Plan for Improving the Quality and Upgrading of Textile Industry (2023-2025), in which it was specified to accelerate innovation driven development and enhance independent innovation capability; Cultivate high-end textile manufacturing and expand industrial development space; Vigorously develop intelligent manufacturing to improve the quality and efficiency of the industry; Promote green cycle and low-carbon, and promote harmonious and sustainable development; Deeply promote the "three products" action, and cultivate new, high-quality and famous products; Improve the flexibility of the supply system and release the market demand potential; Optimize the regional layout of industries, build an open cooperation system and other key tasks.

（3） Growth of China's textile and clothing exports in December

According to the data released by the General Administration of Customs, in 2023, China's textile and clothing exports will reach 293.64 billion US dollars, down 8.1%, of which textile exports will reach 134.5 billion US dollars, down 8.3%, and clothing exports will reach 159.14 billion US dollars, down 7.8%.

In December, China's textile and clothing exports reached US $25.27 billion, which turned to positive growth again seven months later, with a growth rate of 2.6% and a month on month growth rate of 6.8%. Among them, textile exports grew by 3.5% and clothing exports by 1.9%.

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