According to feedback from cotton traders and domestic cotton textile mills in Qingdao, Shanghai, Zhangjiagang and other places, the basis difference of foreign cotton cargo, bonded and customs clearance cotton has been relatively stable in recent days, and the quotations have continued to rebound with the oscillations of ICE and Zheng cotton. The price has increased, but the reluctance of cotton companies to sell remains strong, leaving little room for buyers to negotiate prices.
Affected by the surge in U.S. cotton exports in the week from November 27 to December 3, the USDA’s December report significantly reduced the 2020/21 U.S. cotton production and global ending stocks, and the second epidemic situation in Europe and the United States has slowed down. Crude oil continues to rebound and other positive supports. On December 11, the spot quotations of U.S. cotton, Brazilian cotton, West African cotton, Indian cotton, Australian cotton, etc. rose red with the sharp rise of ICE. The December/January shipping schedule of U.S. cotton EMOT/MOT M 1 -1/8 quotation is 84.5-84.75 cents/pound; while the quotation of port bonded 31-3 36 (strong 28GPT) has risen to 86.90-87.10 cents/pound; Qingdao Port December/January shipping schedule Brazilian cotton M 1- The quotation of 1/8 (strong 28GPT) has also been raised to 82.70-83.70 cents/pound.
An import company in Zhangjiagang said that the “rising” of ship cargo, bonded and customs clearance foreign cotton has led to the continued weakening of domestic textile mills and middlemen’s enthusiasm for inquiry and delivery of goods. The wait-and-see sentiment has increased, and the port cotton ” There is more in the warehouse and less in the warehouse.” Why do traders insist on raising prices? The industry believes that the main points are as follows:
First, the slowdown in the growth of the epidemic in Europe and the United States and the overall acceleration of vaccination; coupled with the initial progress in the U.S. government’s fiscal stimulus plan and other external benefits, will push ICE’s main contract to 78 cents/pound and 80 cents/pound; secondly, according to the usual practice, the issuance of 894,000 tons of cotton import quotas within 1% tariff in 2021 has entered a “countdown”. Some large and medium-sized textile companies and traders may inquire in advance and overdraw the import quota. ; Coupled with the remaining part of the additional 400,000 tons of processing trade quota issued in 2020, it will also be absorbed in December/January, and the contracted export of foreign cotton is expected to usher in a “turn around, spring is warm and flowers bloom”; third, the sharp appreciation of the RMB offsets the impact of ICE, foreign cotton The rise in cotton spot prices has had an impact on Chinese cotton companies and traders. The import costs of U.S. cotton, Brazilian cotton, Indian cotton, etc. have dropped significantly with the appreciation of the RMB. Fourth, China’s cotton demand and domestic and foreign sales of textiles and clothing have taken the lead in emerging from the quagmire of the COVID-19 epidemic. With the help of the signing of the RCEP agreement, the holding of the China-ASEAN Expo, etc., China’s expansion of cotton imports in 2021 is worth looking forward to; fifthly, the overall grade and quality of Xinjiang’s machine-picked cotton in 2020/21 have declined significantly compared with the previous two years. , the supply of high-quality, highly spinnable cotton may experience a periodic gap as textile and clothing production capacity recovers. (Nonsense)
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