Market Analysis: The Global Cotton Market Situation In The Past Week Remains To Be Seen

Last week, cotton prices at home and abroad were weak and volatile. Cotton has been sold successively in the northern hemisphere. The US cotton export contract or the impact of the appreciation of the US dollar has significantly declined. Domestic cotton sales have slightly improved. The next sales situation remains to be seen. Domestic sales of China's textile market continued to weaken, and exports remained relatively active under the influence of "order grabbing". In the short term, the Central Economic Conference and the Federal Reserve's interest rate meeting will be held soon. It is expected that market participants will remain on the sidelines and cotton prices may be carefully adjusted. 　　

1、 Last week's price review

From December 2-6, downstream consumption continued to be weak, textile enterprises were less willing to replenish their stocks, which continued to drag down the cotton price. Zheng Mian's price fell back at the Wansi Pass, and spot prices continued to fall slightly. This week, the average settlement price of the main contract of Zheng Mian Futures was 13922 yuan/ton, down 0.3% from the previous week; The national cotton price B index, which represents the market price of standard lint in the mainland, averaged 15248 yuan/ton, down 0.2% from the previous week. The dollar index has stabilized, the contracted volume of American cotton exports has declined, and the international cotton price has stopped rising and falling. The average settlement price of the main contract of cotton futures in New York was 71.04 cents/pound, down 1.0% from the previous week; The international cotton index (M), which represents the average CIF price of imported cotton in China's main port, is 80.04 cents/pound, a decrease of 0.1% compared with the previous week, and is converted into RMB 13975 yuan/ton of import cost (calculated by 1% tariff, excluding port sundries and freight), an increase of 1.0% compared with the previous week. Affected by the appreciation of the US dollar, the price of foreign cotton converted into RMB rose. The domestic cotton price was 1273 yuan/ton higher than the international cotton price, and the difference between domestic and foreign cotton prices was further reduced by 157 yuan/ton compared with last week.

The textile market further weakened, the operating rate of enterprises decreased, and textile enterprises reported that the sales price of cotton yarn fell. This week, the average price of domestic C32S combed pure cotton yarn was 21255 yuan/ton, down 0.2% from the previous week. The price difference between yarn and cotton further narrowed to 6007 yuan/ton, which remained at the lowest level since April 2024. The US dollar quotation of conventional outer yarn continued to decline, but the price in RMB rose due to the impact of the appreciation of the US dollar. This week, the average price of conventional outer yarn was 22288 yuan/ton, up 0.6% from the previous week. The price of polyester staple fiber was 6979 yuan/ton, down 0.3% from the previous week.

2、 Recent market situation outlook

（1） International market

The Federal Reserve's interest meeting is coming, and the international cotton price is mainly consolidation. The International Economic Cooperation Organization said on December 4 that if the rise of trade protectionism does not affect the recovery of global trade, the world economy will maintain steady growth in the next two years, and the growth rate is expected to reach 3.2% and 3.3% this year and next; At the same time, he warned that since President elect Trump of the United States increased his call for tariffs on major trading partners, the global trade prospect has become cloudy. In terms of the cotton market, the harvest of American cotton turned to the sales stage, and the contracted export volume of American cotton declined significantly after two consecutive weeks of growth. The analysis is related to the high dollar index at the end of November. On November 22-28, the net contracted export volume of American cotton was 38700 tons, 47% less than the previous week. In terms of the textile market, the survey conducted by the International Federation of Textile Manufacturers at the end of November showed that the global order volume had improved, mainly due to the growth of orders in South America. In the short term, the sales of American cotton is the focus of fundamental attention. The Federal Reserve will hold an interest meeting in mid December. It is expected that the international cotton price will maintain consolidation before the interest meeting.

（2） Domestic market

The downstream textile consumption continued to "cool inside and warm outside", and the domestic cotton price operated cautiously. Since September, with the implementation of domestic incremental stimulus policies, the economy has rebounded significantly. In November, the purchasing managers' index of the manufacturing industry was 50.3%, above the 50 boom and bust line for two consecutive months. In the cotton market, the margin of domestic cotton sales has improved. As of December 5, 947000 tons of lint had been sold nationwide, an increase of 419000 tons year on year; The weekly sales volume of 191000 tons was 53000 tons more than that of last week, the highest weekly sales volume since the launch of new cotton this year. In terms of the textile market, domestic sales continued to weaken, and the export situation was relatively optimistic. According to the preliminary investigation of the national cotton market monitoring system, 60% of textile export enterprises reported that the phenomenon of scrambling for export did exist recently, and this phenomenon is still continuing. Since the exchange rate of RMB against the US dollar fell below 7.3 in December, which was a new low in recent five months, it is favorable for the export of textile foreign trade enterprises in the short term. Taken together, it is expected that the export in December will continue to grow.

Considering that the central economic work conference is about to be held, or to create a positive atmosphere for the market and support the bottom of cotton prices; As the downstream textile domestic market is still weakening, the next step of textile enterprises' purchase of domestic cotton is to wait and see. It is expected that the short-term domestic cotton price will operate cautiously.