Cotton prices at home and abroad have rebounded, and the mood of downstream cotton yarn prices has been warm
——China Cotton Market Weekly Report (June 21-25, 2021 )
This week, domestic and foreign cotton prices rose; domestic cotton yarn prices were stable, international cotton yarn prices were firm; polyester staple fiber prices rose.
1. Domestic cotton prices rise
This week, the domestic cotton market is operating smoothly. The price experienced a technical rebound after a period of decline. From June 21 to 25, 2021, the average settlement price of the main cotton futures contract on the Zhengzhou Commodity Exchange was 15,707 yuan/ton, an increase of 46 yuan/ton or 0.3% from the previous week; the national cotton price B represents the market price of standard-grade lint cotton in the mainland. The average price of the index was 15,857 yuan/ton, an increase of 30 yuan/ton or 0.2% from the previous week.
2. International cotton prices rise
This week, the Federal Reserve moderated its interest rate hike remarks, and the market Caution has eased, pushing the U.S. stock market to a record high, coupled with hurricane rains in the U.S. cotton region, supporting the rise in international cotton prices. From June 21 to 25, 2021, the average settlement price of the main contract of Intercontinental Exchange Cotton Futures (ICE) was 86.13 cents/pound, an increase of 0.51 cents/pound or 0.6% from the previous week; representing the arrival of imported cotton at China’s main port The average price of the international cotton index (M) on shore is 96.81 cents/pound, up 0.32 cents/pound or 0.3% from the previous week, and the import cost in RMB is 15,497 yuan/ton (calculated based on 1% tariff, including Hong Kong miscellaneous goods). and freight), an increase of 49 yuan/ton, or 0.3%, from the previous week. The international cotton price is 360 yuan/ton lower than the domestic cotton price, and the internal and external price difference has narrowed by 20 yuan/ton compared with last week.
3. Domestic cotton yarn prices remain stable and international cotton yarn prices remain strong
This week, textile The market is calm, early orders have been basically completed, finished product inventories of some companies have increased, pure cotton yarn prices have remained stable, low-priced yarns have been slightly better shipped, while combed and other varieties have been colder; imported yarns have been shipped relatively well, with firm prices. However, the market reflects that there is a price but no market; the current price of conventional foreign yarn is 380 yuan/ton higher than that of domestic yarn. Orders in the downstream gray fabric market have decreased significantly. Weaving mills are cautious in stocking up and have a strong wait-and-see mood. Pure cotton prices remain stable. The price of polyester staple fiber rises with the raw material PTA.
4. Market outlook
The Federal Reserve’s repeated remarks have slightly increased the rational atmosphere in the international cotton market. The Markit manufacturing PMI in the United States hit a record high in June, suggesting strong manufacturing activity. The U.S. employment data is uncertain, and the Federal Reserve insists that high inflation is only temporary, continuing to increase financial market instability. In the international cotton market, 96% of new cotton planting in the United States has been completed, with budding lagging behind year-on-year, and the proportion of good seedlings increasing significantly. With the increase in cotton prices in India and the increase in the minimum purchase price (MSP) of seed cotton, the area of new cotton in northern India is increasing. Increase, the cotton planting area in some areas is expected to increase by 5-10%. After the epidemic in Southeast Asia led to an increase in international cotton yarn prices, market performance varied greatly, and the recent price support atmosphere has significantly weakened. As the fiscal measures introduced by the federal government weakened in stimulating increased consumption, overall U.S. retail sales fell by 1.3% month-on-month in May, and U.S. terminal apparel and apparel sales are expected to decline in June. In the short term, the Federal Reserve’s repeated remarks, coupled with weather fluctuations in the US cotton area, may cause some disruption to the market, and the rational atmosphere in the international cotton market has slightly increased.
Domestic cotton prices have stabilized. After nearly four months, the central bank has once again increased the scale of reverse repurchase operations, with a net investment of 20 billion yuan for two consecutive days this week, promoting liquidity to stabilize. In terms of the domestic cotton market, the weather in the Xinjiang cotton area has been good recently, cotton has gradually entered the budding stage, and cotton growth has entered the weather observation window. On the supply side of the domestic cotton spot market, domestic cotton inventories are declining while imported cotton inventories are increasing. According to the latest data released by the Cotton Association, the total national cotton turnover inventory at the end of May was approximately 2.6894 million tons, a decrease of 540,300 tons from the previous month. The decline expanded from the previous month and was lower than the 158,900 tons in the same period last year. As of the week of June 21, the total cotton inventory in Zhangjiagang Free Trade Zone continued to rise to 9.36 tons, an increase of 0.91% from the previous week. The downstream market has entered the traditional off-season, and the phenomenon of small batches and multiple varieties is prominent. The production and sales of the cotton yarn market are basically balanced. Some merchants’ sentiments about cotton yarn prices have begun to cool down. Most yarn traders basically focus on shipments and do not consider large-scale purchases and stockpiling. In an environment where domestic policies are relatively stable, domestic cotton prices are still mainly stable in the short term.