Market Dynamics: Zheng Mian'S Main Contract Continues To Fluctuate In A Narrow Range

On the first trading day of February, the main contract of Zheng Mian continued to fluctuate in a narrow range and closed at 16025 yuan/ton. Traders waited for the weekly export sales report to be released by the US Department of Agriculture (USDA) on Thursday. After early destocking, the pressure on the inventory of downstream finished products has eased, but with the approaching of the Spring Festival, the downstream market is at the end of the year, and the stock of raw materials is nearing the end. After the year, it is necessary to continue to track the sustainability of the improvement of the downstream market.

The operating rate of downstream enterprises dropped slightly in the near year. Although the starting point of the cotton mill holiday was delayed compared with the previous expectation, the duration of the holiday was not shortened too much. The spot delivery of cotton has turned weak, the acceptance of textile enterprises is low, and the rigid demand is mainly purchased. Cotton inventory of textile enterprises continued to decrease, which was at a low level in the same period of previous years; The cotton yarn inventory of textile enterprises was transferred from destocking to small accumulation this week, which was low in the middle of the same period in previous years. The cotton yarn inventory of the cloth factory was slightly removed from the warehouse, and the grey fabric inventory was slightly accumulated. Huarong Rongda Futures said that at present, the cotton yarn market has gradually entered the holiday state, and logistics in some regions has been suspended, and the market turnover has shrunk significantly. Textile enterprises basically maintained low inventory before the festival, and the market was bullish after the festival.

As for the evolution of market logic, Ruida Futures said that the processing of new cotton continued to advance, and with the arrival of imported goods, the market supply was relatively sufficient. The mid stream textile enterprises' stock preparation is coming to an end. They mainly need to purchase just now, and the production consumes more cotton stocks in the early stage, leading to a slight decline in the textile enterprises' raw material inventory, but still higher than the level of the same period last year.

In addition, the early orders are still on the machine, the delivery is gradually completed, and the regular yarn of the weaving factory is steadily followed up. With the approaching of the Spring Festival holiday, textile enterprises have entered the final stage of startup, and the demand for raw materials is expected to gradually cool down. The profit margin on the short-term demand side weakened, and Zheng Mian's rebound space is expected to be limited before the festival.