During the Spring Festival, U.S. crude oil futures, metals, black commodities and ICE cotton futures all experienced surges. Among them, the main ICE cotton contract strongly exceeded 90 cents/pound. For funds and bulls, the first goal has been achieved. , ICE’s main contract oscillator will be raised to 88-95 cents/pound.
Several international cotton merchants and importing companies believe that domestic vaccination in the United States is accelerating. At the current speed, the United States can achieve the 70% population coverage target by the end of the second quarter. The turning point in the number of cases has been confirmed, and the market is optimistic about US$1.9 trillion. Expectations for the introduction of stimulus policies are getting stronger, coupled with sharp increases in energy, crude oil, iron ore, etc., the U.S. consumption and inflation data in January both “exploded”, so ICE cotton futures stood firm at 90 cents/pound, testing 95 Cents/pound is a high probability event. For some cotton companies and traders who did not choose to enter the market for procurement below 85 cents/pound, this round of opportunities has been missed, while industrial enterprises need to consider gradually entering the market for hedging at 90-100 cents/pound ( Including 2021/22 lint).
According to feedback from cotton traders in Huangdao and other places, affected by the sharp rise in ICE and Zheng cotton, the quotation for port customs clearance M 1-1/8 has been raised to 16,750-16,850 yuan/ton (the buyer brings his own quotation within the 1% tariff import quota 15450-15600 yuan/ton), while the quotation of spot US cotton 31-3 36/37 at the port has risen directly to 17000-17200 yuan/ton. The RMB prices of US cotton and Brazilian cotton are 400-500 yuan/ton higher than before the Spring Festival. Cotton companies in Zhangjiagang, Shanghai and other places said that as textile companies resume work and start up operations after the holiday, raw material procurement will gradually begin. The increase in cotton and polyester staple fiber quotations is mostly a test. It is necessary to observe the situation of cotton textile, clothing, foreign trade companies and other end markets. According to the response, the phenomenon of “price but no market” will take about a week to improve. </p
