This year, the cotton market has been affected by the epidemic, and downstream textile and apparel consumption has declined. The sharp shrinkage in short-term demand has put great pressure on industry operations. At present, there is a lack of foreign orders, limited domestic sales space, and the downstream performance of the industry is still sluggish. People in the industry are debating whether cotton prices can rise.
The author briefly summarizes the recent opinions of some market participants, which mainly fall into the following categories: Some believe that the current gauze inventory of textile companies is high. In the absence of order follow-up, the enthusiasm of the industry is low, and the company’s operating rate is also low. The load reduction in some regions is enough to show the market pressure they are facing. Therefore, due to the lack of support from demand, the situation of cotton being difficult to sell has been determined, and price increases are out of the question.
The other part believes that the main factor affecting the market is the epidemic. The worst days have passed, and with the growth of epidemic prevention experience, the textile industry is constantly repairing. The current external market of US cotton continues to rise, which will surely drive Domestic cotton prices rose. Others believe that the continuous release of water at home and abroad, and the recovery of the overall market economy, will definitely drive the cotton price to rebound. Whether it will rise or not depends on the enthusiasm of investors.
It can be seen from the above types of views that all parties in the market have different focuses on driving cotton prices and have drawn different conclusions. At the same time, there is no careful comparison of the time and space for whether cotton prices can rebound. It is understandable to judge market trends from the perspective of supply and demand, but if you ignore factors such as market mentality, macro market environment, and traders’ profit-seeking competition, you will inevitably be led into a blind spot.
On the other hand, today Zheng Cotton once again stood at the 12,000 yuan/ton mark. Does it prove that there are loopholes in his analysis? Poor demand in the textile industry has suppressed the current and even medium- and long-term markets. However, in the short-term market trend, do we need to pay more attention to the impact of other variables? Being able to make reasonable judgments on the long-term or short-term impact of relevant factors in a timely manner, and then systematically classifying long and short drivers, eliminating the interference of messy news, may be more conducive to industry players making rational and reasonable decisions.
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