Recently, with the increase in macro-disturbance, Zheng Cotton has stepped out of the current divergence trend. The futures price during the Golden Three Peak Season has fallen by more than 1,500 yuan/ton, and the spot price has dropped by 663 yuan/ton; cotton yarn futures prices have fallen by 2,500 yuan/ton. Above, the spot price has dropped by a cumulative 1,000 yuan/ton. According to research, cotton spinning companies currently place orders for cotton yarn until April, and some companies place orders until May. Most of these orders are received around the Spring Festival. As Zheng cotton rises and falls, subsequent orders are hesitant, and the yarn mills offer profits for shipments, but the results are Very little, some companies with sufficient orders are holding up prices and waiting to wait for Zheng cotton to stop falling and stabilize.
Purchasing enthusiasm has declined
Recently, textile companies have rushed to make early orders, and production has been normal. However, due to the fluctuation of domestic and foreign cotton prices, there has been insufficient follow-up on new orders for textiles and clothing. , some new orders continue to lower prices, cotton yarn inventories have accumulated slightly, and companies’ enthusiasm for cotton procurement has declined. According to research, the price of Zheng cotton fell back from around 17,000 yuan/ton to around 15,300 yuan/ton. Some textile companies purchased cotton at low prices near 15,500 yuan/ton. However, as Zheng cotton fell below the 60-day moving average, there was insufficient follow-up on new orders, and yarn The enthusiasm of factories to purchase cotton has dropped significantly. The current cotton inventory of Shandong cotton spinning enterprises is 55 days, a decrease of 5 days from last week and an increase of 26 days from the same period last year.
From a long-term perspective, cotton supply and demand are performing normally. From the demand side, the current textile industry chain is still in the stage of improving demand margin after the epidemic. With the support of the traditional peak seasons of gold, silver and four, the inventory of the textile industry chain is low, cotton spinning enterprises are operating at full capacity, and cotton consumption is guaranteed. From the supply side, as of the end of February, the national cotton commercial inventory was 5.2884 million tons, a month-on-month decrease of 1.13%, and a year-on-year decrease of 13.92%; the national cotton industry inventory was 891,600 tons, a month-on-month decrease of 12.73%, a year-on-year increase of 3.31%.
The countdown has begun
According to market monitoring, the price difference between domestic and foreign cotton on March 22 was 1,537 yuan/ton, exceeding 800 yuan/ton for 3 consecutive working days. Ton. According to the regulations, the cotton rotation cannot be started for the time being. Rotation regulations: The rotation trading time of Xinjiang cotton in 2020 is the national legal working day from December 1, 2020 to March 31, 2021. During the cotton rotation period, when the domestic cotton price is 800 yuan/ton higher than the international cotton price (based on 1% tariff) for three consecutive working days, the rotation transaction will be suspended from the 4th working day; when the domestic cotton price is higher than the international cotton price, When the price/spread falls back to within 800 yuan/ton, the rotation transaction will be restarted on the first working day after the fall. There is still a week left before the deadline for the rotation, and it is expected that the probability of failure in the rotation is high. In view of the current low state reserve cotton inventory, the probability of continued rotation in the later period is high.
Overall, the current fundamentals of cotton are still in a marginally positive stage, supply and demand are normal, and the room for decline in Zheng cotton will be limited in the future. In recent years, as the financial attributes of Zheng Cotton have improved, the impact of macro factors on Zheng Cotton has been magnified. During the week, factors such as sluggish Sino-US negotiations, interest rate hikes in many countries, and falling crude oil have all dragged down the commodity trend, and Zheng Cotton has also fallen under pressure. In addition, after 11 months of continuous rise after the epidemic, domestic and foreign cotton prices have increased by about 10% compared with before the epidemic. However, the demand market has been recovering slowly, and there is demand for a correction in cotton prices. As the macro impact weakens in the later period, Zheng Cotton is expected to return to fundamentals, focusing on the follow-up of subsequent orders and the news of new flower planting in April. </p
