Market Dynamics: Cotton Boom In ICE Period, Zheng Mian Continuing To Rebound

Zheng Mian's main contract continued to rebound on Friday, closing at 16200 yuan/ton, with a daily increase of 0.57%. The cotton in ICE period rose sharply, mainly because the weekly export sales data was strong, and investors were waiting for the monthly supply and demand report to be released by the US Department of Agriculture. The sustainability of the improvement of the domestic downstream market awaits verification.

At present, the correlation between Zheng Mian and American Cotton is small, but the focus is still on the demand side. It is further understood that the recent sharp price reduction of cotton mills or sales promotion is mainly for large orders. The motivation is different from that in November, and the impact on the market is small, which needs further tracking. In addition, yesterday, the General Administration of Customs announced the export data of China's textile and clothing from January to February, including 23384.8 (million dollars) of clothing and clothing accessories, with a cumulative year-on-year growth of 13.1%; Textile yarn, fabric and its products totaled 21710.5 million US dollars, up 15.5% year on year. The export department was on the high side in the same period of previous years.

With regard to the evolution of market logic, the supply is loose in stages, and the demand expectation is still there. With the strengthening of foreign cotton prices, cotton prices have entered the market of shock and rebound. At present, the cotton yarn inventory of the cotton mill is at a high level, and there is less new increase after the festival. The willingness to replenish is low, and the cotton yarn shipment of the cotton mill is not smooth, which is further transmitted to the cold spot delivery of cotton. The short-term demand side is under pressure, and Zheng Mian may maintain a volatile operation. In the medium term, although the cloth factory has few new orders at this stage, the stock orders are still sufficient. After a period of time, the cotton yarn inventory may be reduced. At the same time, after the seasonal orders are issued in March, Zheng Mian may rise again.