Since the National Day holiday in 2020, the price of Zheng cotton has continued to rise, reaching a high of 17,080 yuan/ton. The rapid rise of Zheng cotton is closely related to the global “release of water”, the gradual recovery of the epidemic, and the continuous improvement of cotton fundamentals. At the end of February, as Zheng cotton prices fell sharply, market tension intensified, and textile companies’ raw material procurement slowed down.
According to the March USDA supply and demand monthly report, the total global cotton production in 2020/2021 was 24.672 million tons, a month-on-month decrease of 180,000 tons; global consumption was 25.574 million tons, a month-on-month increase of 55,000 tons; the ending inventory was 2059.5 million tons, a month-on-month decrease of 249,000 tons, lower than market expectations. As soon as this data came out, U.S. cotton fell sharply. On March 9, ICE futures prices fell to 84.32 cents/pound, down 4 cents/pound from the previous day. As of the 10th, U.S. cotton rebounded slightly, with ICE futures prices at 88.32 cents/pound.
Affected by the decline in domestic and foreign cotton prices, domestic textile companies and traders, large and small, have reduced their willingness to purchase, and the lint cotton transaction volume has declined. At present, the factory price of 3128B grade public inspection in Jiangsu is about 16,600 yuan/ton, and corporate orders are scheduled to April to May; the raw material purchase order price of most companies in Hebei remains at about 16,000 yuan/ton; the quotation of Anhui lint cotton is 15,550-16,050 yuan/ton. tons, orders are scheduled to May-June. With the arrival of the traditional peak sales season in March and April, textile companies may usher in a wave of concentrated inventory replenishment. </p