Market Trends: Review The Trend Of Cotton Market In A Week

The growth of domestic cotton is faster than that of last year, and the topping work has entered the peak period. The continuous high temperature weather in some cotton regions is not conducive to cotton growth, and the impact on the yield needs further attention. Domestic cotton supply and demand remained loose, and the operating rate of textile enterprises rose month on month.

The situation of abundant cotton supply in the international market has not changed, but the continuous decline of cotton prices in the early stage has "digested" this negative factor. Cotton in the northern hemisphere has entered a critical growth period, and weather change will be one of the focuses of the market. In addition, whether the intensification of trade friction between the EU and China will affect textiles and clothing remains to be further observed.

　 1、 Last week's price review

This week, cotton prices at home and abroad fluctuated in a narrow range. On July 15-19, the average settlement price of the main contract of Zhengzhou cotton futures was 14679 yuan/ton, up 106 yuan/ton from the previous week, or 0.7%; The national cotton price B index, which represents the market price of standard lint in the mainland, averaged 15674 yuan/ton, up 8 yuan/ton or 0.1% from the previous week.

The average settlement price of the main contract of cotton futures in New York was 71.7 cents/pound, up 0.77 cents/pound or 1.1% from the previous week; The international cotton index (M), which represents the average landed price of imported cotton at China's main port, was 79.85 cents/pound, up 0.76 cents/pound from the previous week, and converted into RMB 13791 yuan/ton of import cost (calculated at 1% tariff, excluding port sundries and freight), up 131 yuan/ton or 1.0% from the previous week. The domestic cotton price is 1883 yuan/ton higher than the international cotton price, 123 yuan/ton lower than last week.

The average price of domestic C32S combed pure cotton yarn was 22155 yuan/ton, down 40 yuan/ton from the previous week. The average price of conventional outer yarn is 22264 yuan/ton, down 73 yuan/ton from the previous week, and 109 yuan/ton lower than that of domestic yarn. The average price of polyester staple fiber is 7767 yuan/ton, down 32 yuan/ton from the previous week.

　 2、 Recent market situation outlook

（1） International market

The situation of abundant cotton supply has not changed, and the uncertainty of trade environment has increased. The cotton production situation in the main producing countries has not changed much recently. According to the cotton production report released by the U.S. Department of Agriculture, as of July 14, the U.S. cotton excellence rate was 45%, unchanged month on month and the same period last year. According to the agricultural drought report, as of July 16, about 16% of the cotton producing areas in the United States had been affected by drought, and the drought situation was slightly eased compared with last week. Cotton picking in Brazil has gradually started. According to the statistics of the Brazilian National Commodity Supply Company, as of July 14, the area of cotton harvested accounted for 16.7% of the total area, 5.5 percentage points higher than the previous year. The pattern of abundant global cotton supply remains unchanged, but the continuous decline of cotton prices in the early stage has "digested" this negative factor. As cotton in the northern hemisphere enters a critical growth period, weather changes in major producing countries will be one of the focuses of the market. It should also be noted that international trade frictions have intensified recently. After the EU announced the imposition of tariffs on China's new energy vehicles, China plans to conduct countervailing and anti-dumping investigations on EU cars, pork, alcohol and dairy products. If trade frictions continue to escalate, China's textiles and clothing may also be subject to EU sanctions.

（2） Domestic market

The downstream market remains weak, and the hot weather deserves attention. The downstream textile market is still in the off-season, but there are signs of marginal improvement in the near future. Some enterprises report that a small number of autumn and winter orders have begun to be issued. According to the survey of the national cotton market monitoring system, the start-up rate of textile enterprises sampled in early July was 74.4%, up 3.1 percentage points month on month; The yarn production and sales rate was 92.7%, down 1.8 percentage points month on month. In terms of new cotton production, Xinjiang cotton is growing fast, most of the cotton fields have entered the flowering and boll stage, and the topping work is in progress. According to the Xinjiang Meteorological Observatory, the recent high temperature of more than 35 degrees occurred in most parts of the Xinjiang plain. Under the influence of continuous high temperature, some cotton fields appear the phenomenon of flowers and bolls drying and falling off, which has a certain impact on cotton yield. The weather conditions and impact scope in the later stage need further attention. In the short term, the domestic cotton market continues the pattern of loose supply and demand, and the downstream demand situation is not yet clear. It is expected that the domestic cotton price will maintain shock consolidation.