The current resonance and upward structure of domestic and foreign cotton prices cannot conceal the problems behind it. The early oversoldness and value restoration are the main driving forces for this year’s rebound. Under the condition that there is still great resistance to downstream consumption, the probability of short-term cotton prices remaining volatile is high. The epidemic and consumption are the main reasons affecting the trend of cotton prices, but some experts point out that in the context of the epidemic gradually being controlled in the future, consumption will become an important factor leading to the rise and fall of cotton prices in the post-epidemic period.
Although this year’s epidemic has had an impact on Xinjiang’s cotton production and has become a reason for market speculation in the short term, judging from the current situation of cotton forming peach and cotton lint, the impact is limited. According to recent knowledge, the area of Xinjiang has decreased year-on-year this year, and the yield per unit area has increased in most areas. It is expected that the total output may be slightly lower than last year, which will have minimal impact on the market. The current sporadic purchase price is above 6.0 yuan/kg.
At a recent cotton situation analysis meeting, some cotton professionals said that due to the epidemic, the downstream operation rate was high from February to March this year, and from April to May, affected by the decline in foreign orders, the operation rate was the lowest. down to 30%. In terms of spinning costs, companies have basically been losing money, and it was not until the end of August that cotton yarn prices stabilized. This year’s orders are characterized by small quantity, urgent time, and low prices. It is common for textile mill inventories to gradually increase. Whether demand can recover later depends on the recovery of the epidemic. The United States’ restrictions on the use of Xinjiang cotton are a big negative.
Currently, cotton supply is loose, inventory-to-consumption ratio is high, downstream consumption has decreased significantly, and the contradiction between supply and demand is still prominent. Judging from the current price comparison between cotton and cotton yarn, cotton prices are rising weakly. The trend of cotton prices is more subject to the influence of the general environment. Based on the price difference between domestic and foreign cotton, substitutes, and upstream and downstream conditions, the short term is full of uncertain factors, including Sino-US relations and the US election. Therefore, the current cotton market is still facing greater downward pressure. </p
