According to feedback from cotton trading companies in Qingdao, Shanghai, Zhangjiagang and other places, although the Australian cotton basis has been reduced since late January, domestic production and sales of high-count yarn 60S and above are booming, and 894,000 tons of cotton are imported within the 1% tariff. Quotas have been issued, but Australian cotton inquiries and transactions have not improved much compared with November/December, and the performance is significantly weaker than Brazilian cotton, US cotton, Indian cotton, etc.
A middleman in Zhangjiagang said that as of the end of January, the quantity of bonded + customs cleared Australian cotton in China’s main ports in 2019/20 dropped significantly compared with the previous two years, but judging from the commodity inspection report, it was M 1- Mainly high quality and high grade 5/32 and above, strong 28GPT and above, the index is significantly higher than the spot US cotton, Brazilian cotton, Indian cotton at the port, but because the RMB quotations of traders and import companies are “high”, it is not “applauded” The phenomenon of “popularity” is still prominent (the “fixed price” ratio of Australian cotton for port customs clearance is high and the basis price is low).
In the past two days, Qingdao Port’s M 1-5/32 RMB quotation is 17,600-17,700 yuan/ton, and M 1-3/16/M 1-7/32 RMB quotation is 17,800-18,000 yuan/ton (net weight ), higher than 31-3 37/41-3 37 US cotton at more than 1,200 yuan/ton; higher than M 1-5/32 Brazilian cotton at more than 1,500 yuan/ton.
Several foreign businessmen and cotton importing companies have not only increased their quotations and sales of Australian cotton for February/March and May/October shipping dates, but also expressed their expectations for the recovery and growth of Australian cotton exports to China in 2021. Expectations are strong. The market believes that the Biden team is more rational and professional than the previous administration. Many elites from the Obama administration have returned, providing more predictability for foreign policy. There is a certain basis for the good development of Sino-US relations, and China-Australia relations will also Ushering in a period of testing, ice-breaking and recovery, Australian cotton has greater hope of re-entering the Chinese market “without barriers”. In addition, Australian cotton output is expected to reach more than 2 million bales in 2020/21, so the export environment is improved compared to 2019/20. Judging from the quotation, the basis difference for SM 1-5/32 in February/March is concentrated at 14.5-15.5 cents/pound (ICE2103+basis); the basis difference for SM 1-5/32 in June/July/August is 15-16 cents/pound (ICE2107+basis). </p
