Affected by ICE cotton futures falling below 60 cents since mid-March, bonded/spot/shipping quotations for US cotton, Brazilian cotton, West African cotton, etc. have subsequently been lowered, but Chinese textile companies and middlemen have made inquiries and signed contracts The volume has not improved much, and the port inventory is “too much warehousing but too little” (bonded + non-bonded), and the pressure continues to rise slowly.
On March 17, Qingdao, Zhangjiagang and other ports quoted prices for March/April shipping schedule ME51-4 (length 38-39, strong 29-30GPT), EMOT41-4 (length 36-38 strong 28GPT) They are 64.90-65.05 cents/pound and 68.50-68.70 cents/pound respectively; the March/April shipping date of M1-5/32 Brazilian cotton is quoted at 70.55-70.65 cents/pound. The spot adjustment rate is significantly weaker than that of ICE futures. Export enterprises and international cotton merchants have achieved the purpose of reluctant to sell and hold up prices by raising the basis; while the imported cotton customs clearance spot has also increased the basis for CF2005 by 50-100 yuan/ton, and traders have tried their best to reduce the sharp decline in ICE and Zheng cotton. The losses and risks brought to the spot market. On March 17, the net RMB quotations of bonded M1-1/8 Brazilian cotton and M1-5/32 Indian cotton at the port were 12330-12360 yuan/ton and 12200-12250 yuan/ton respectively, which was an overall decrease of 300-400 yuan compared with early March. / ton, taking into account the conversion of net weight and gross weight, the quotations of customs clearance cotton and 3128B Xinjiang cotton in mainland warehouses are basically “in line”.
Some textile companies in Shandong, Jiangsu, Zhejiang, Henan and other places reported that although they quoted prices from bonded cotton and customs-cleared cotton Judging from the current situation, the competitiveness of foreign cotton is stronger than that in December/January, but the following four factors have caused slow shipments and buyers’ enthusiasm for purchasing needs to be improved:
First, the current port bonded + There are not many high-quality, high-spinnability lint cottons in the non-bonded foreign cotton spot, and the inventory is “large but not refined”. Not only the color grade of American cotton, Brazilian cotton, and West African cotton is low, but the length and breaking strength are not “unsatisfactory” , the March/April shipping schedule and various indicators of U.S. cotton have improved significantly;
Secondly, although domestic cotton textile and clothing companies have resumed work and production relatively quickly since mid-to-late February, but Due to the outbreak of the new crown epidemic in the Middle East, Europe, and the United States, not only new orders have shrunk significantly, but export orders signed in December/January are also facing cancellation or delayed delivery;
The third is The RMB exchange rate has once again “broken 7” in recent days, and the cost of imported foreign cotton has increased accordingly. Some textile companies with ample funds and cotton import quotas are waiting for the opportunity of the central bank to cut interest rates and release liquidity, which will lead to the appreciation of the RMB;
Fourth, the COVID-19 epidemic is raging around the world and has not reached its peak. The “alarm” of falling financial markets, stock markets, and commodity futures is difficult to lift, and the bottoming out of cotton prices may not be over yet. </p
