According to feedback from cotton trading companies in Qingdao, Shanghai, Zhangjiagang, Guangzhou and other places, since mid-March, the pressure on bonded, customs-cleared foreign cotton sales and outbound shipments at ports has continued to rise. Some cotton companies have used pledge financing and sold a small amount of goods at low prices. and other methods to temporarily solve the financial problem; compared with some inquiries and transactions of low-quality spot goods at the port, high-quality and high-grade foreign cotton performed more deserted and weaker, and some companies that mainly operate Australian cotton, American cotton, and Pima cotton Traders did not even “open” for a week or half a month, and the few actual orders placed by textile companies were mostly placed directly to international cotton merchants or export companies.
An import company in Zhangjiagang said that domestic customers for Pima cotton and high-quality Australian cotton are relatively fixed, and it is difficult to reduce prices to increase volume; coupled with the high cost of lint acquisition and processing, international cotton merchants and domestic trade The adjustment range of corporate quotations does not closely follow that of ICE or Zheng Mian, and its “resistance to declines and increases” is very strong.
Why can’t high-grade and high-quality foreign cotton “sell”? Industry analysis mainly has the following three reasons:
First, with the outbreak of the new crown epidemic in European and American countries, a large number of medium and high-quality textile and clothing export orders have been canceled or postponed since March. my country’s large and medium-sized textile enterprises Correspondingly, the purchase of high-quality Australian cotton, SJV American cotton, Pima cotton, etc. has been greatly reduced, and raw material inventories have continued to decline; the number of importing companies and retailers specifying Australian cotton, long-staple cotton and cotton blends has also been significantly reduced;
Second, there is a large price difference between high-quality Australian cotton, American cotton and medium- and low-quality foreign cotton. Since early May, Qingdao Port’s 2019 SM 1-5/32 Australian cotton (strong 29-30GPT) has been quoted at 14,500-14,900 yuan/ton (net weight, the same below), while in the same period, Indian M 1-5/32 and Brazilian cotton M The quotations for 36 are respectively 11,800-11,900 yuan/ton and 12,250-12,350 yuan/ton, with price differences reaching 2,600-3,000 yuan/ton and 2,200-2,600 yuan/ton;
Thirdly, exports have encountered obstacles, and some Textile and clothing companies have taken the domestic market as a breakthrough point, and it is common to reduce cotton grade, yarn count, and inspection indicators. In many cotton spinning mills in Henan, Shandong, Jiangsu and other places, the proportion of 50S and above carded and combed yarn has dropped significantly compared with the same period last year. The order of raw material replenishment is “real estate cotton, Xinjiang cotton, Brazilian cotton or medium and low quality US cotton, SJV ACALA, Pima or Egyptian long-staple cotton.” As long as the yarn quality and various indicators meet customer requirements, Australian cotton and Pima cotton should be used as little or as little as possible. </p
