According to feedback from cotton traders in Qingdao, Zhangjiagang, Shanghai and other places, although the main contract of ICE cotton futures plunged sharply last week, causing a certain degree of worry and panic among cotton companies and speculators, regardless of cargo, bonded cotton or customs clearance, The basis of cotton quotations has not been adjusted.
Although inquiries and transactions of medium and high-quality US cotton, Brazilian cotton, and Australian cotton are inactive or even deserted, and cotton stocks in China’s major ports have continued to rise since February, and some bonded warehouses have tight storage capacity, international cotton merchants , Cotton trading companies have no strong desire to take the initiative to lower the basis and stimulate sales.
A cotton merchant said that in the early morning of February 27, the U.S. House of Representatives voted to pass a new round of economic rescue plan worth US$1.9 trillion. Subtle changes in geopolitics in the Middle East triggered expectations of another sharp rise in crude oil. European and American countries Favorable factors such as large-scale vaccination are expected to push the global economy, trade, and textile and apparel consumption back to “on track” quickly. Therefore, ICE’s temporary retreat to gain momentum is a reasonable demand after the “Nine consecutive Yangs”. It recovered 90 cents in the first and middle of March. / pound, 95 cents / pound is more likely, and ICE’s main contract focus is expected to return to 95-100 cents / pound. From the current point of view, every time ICE futures fall below 90 cents/pound, it is an opportunity for cotton textile mills and middlemen to enter the market at low prices and purchase. According to CFTC statistics, as of February 23, the long rate of ICE futures rose to +28.66%, an increase of 0.88% from February 16.
Several large and medium-sized cotton textile companies in Henan, Jiangsu and other places said that the current supply of long-staple cotton such as American SJV Pima cotton and Egyptian Giza 86/88 in China’s main ports is relatively tight, which is different from fine staple cotton. Cotton sales were inactive and even light in stark contrast. Textile enterprises do not agree with the claim by some foreign investors and large-scale cotton companies that Pima cotton is “hard to find”. The key is that buyers and sellers have large differences on the price of Pima cotton, especially SJV Pima cotton regardless of the US dollar quotation (shipping goods) (or bonded) or customs clearance RMB quotations are obviously on the high side, and it is difficult for textile enterprises to accept and digest them.
On February 27-28, the fixed price of SJV 21-2 48 (17/18 and 18/19 old cotton, Qiangli 40, horse value G5) of a large cotton company reached 27,200-27,300 yuan/ tons, while the quotation of 3136/3137 Aksu long-staple cotton in Jiangsu, Hubei, Shandong, Henan and other inland warehouses is only 21,800-22,000 yuan/ton; the quotation of 3138 (strong 40CN/TEX and above) is 23,800-24,000 yuan/ton, which is significantly lower than SJV Pima cotton. </p
