Recently, downstream consumption has turned from hot to cold, and corporate orders and profits have declined to a certain extent. This has had a negative impact on upstream cotton consumption. The recent decline in cotton futures prices has a lot to do with this.
According to people in the cotton industry, the order situation in November is not as good as that in October. “Double 11” has passed, and Christmas orders should be shipped and delivered before the end of November at the latest (it is now a question of whether purchasers can receive the goods due to the epidemic) ), internal and external market orders lack continuity. Most yarn mills and fabric mills place orders until around mid-December, but considering that it takes 15-20 days from order receipt to production, it is expected that the situation will deteriorate further after late December.
A textile company in Henan stated that recent orders have remained normal, with limited impact from seasonal orders. However, yarn prices have dropped significantly. Although cotton prices have dropped, early purchase prices have been higher, and spinning prices have declined significantly. Yarn profits are still lower than in October. The current cost of lint purchased by companies is 14,000 yuan/ton. Although the absolute price is not high, companies are worried that the continued decline in cotton prices will affect profits.
Market professionals believe that the recent market hot spots have been constant, and the impact of the formal signing of the Regional Comprehensive Economic Partnership Agreement (RCEP) on the cotton spinning industry deserves attention. According to customs statistics, in the first two months of this year, ASEAN has It has surpassed the European Union and the United States to become China’s largest trading partner. The China-ASEAN Free Trade Area is also the third largest free trade area in the world after the European Union and the United States-Mexico-Canada Free Trade Agreement. Since China has zero tariffs on ASEAN gauze, the short-term impact is limited, but in the long term, benefiting from the vast consumer market in the free trade zone, it will bring positive changes to China’s cotton textile industry. There will still be many risk events in the market in the future, and the weak situation of the cotton spinning industry in the short term will not change. As consumption is difficult to improve, the cotton market will maintain fluctuations within a range. </p
