This week, ICE cotton futures fell sharply again, domestic cotton spot prices continued their decline, and the decline in downstream cotton yarn prices expanded. The market has a strong wait-and-see atmosphere.
1. The intended area of U.S. cotton is higher than expected and international cotton prices continue to fall
This week, the four-month cotton rotation work in Xinjiang ended smoothly, stabilizing domestic market confidence. Significantly. According to a survey by the U.S. Department of Agriculture, the intended area for U.S. cotton planting has declined more than expected, causing ICE cotton futures prices to once fall below 50 cents/pound. Under the pressure of no improvement in the global epidemic, domestic cotton spot prices continue to decline. The settlement price of the main cotton futures contract in Zhengzhou is 10,910 yuan/ton, up 175 yuan/ton or 1.6% from the previous week; the average price of the national cotton price B index, which represents the market price of standard grade lint cotton in the mainland, is 11,198 yuan/ton, down 108 yuan/ton from the previous week. Yuan/ton, down 1.0%. The settlement price of the main New York cotton futures contract was 50.98 cents/pound, down 0.35 cents/pound or 0.7% from the previous week; the average price of the International Cotton Index (M), which represents the average CIF price of imported cotton in China’s main port, was 61.68 cents/pound. pounds, a decrease of 2.27 cents/pound, or 3.5%, from the previous week. The import cost in RMB is 10,909 yuan/ton (calculated based on 1% tariff, including port miscellaneous goods and freight), a decrease of 358 yuan/ton, or a decrease of 3.2% from the previous week. , the price difference expanded by 250 yuan/ton compared with the previous week.
2. The price of cotton yarn has accelerated due to the lockdown in many countries to combat the epidemic
Recently, in the face of severe epidemics, many countries in Europe and the United States have closed down their cities. Orders for the global textile and apparel industry have been disrupted, and domestic companies have suffered heavy losses. Textile enterprises are under great pressure on cotton yarn inventories, and the price decline continues to expand. Downstream gray fabric trading is light. Affected by the sharp fluctuations in international crude oil prices, the focus of polyester staple fiber prices has shifted sharply downwards. The price of conventional outer yarn is 597 yuan/ton higher than that of domestic yarn; the price of polyester staple fiber fell by 314 yuan/ton to 5,422 yuan/ton.
3. Outlook for the Market Outlook
On March 27, the Political Bureau of the CPC Central Committee announced at a meeting that my country will appropriately increase the fiscal deficit ratio and issue special government bonds. The State Council decided to increase re-lending by small and medium-sized banks. The discount limit is 1 trillion yuan. As of the publication of the report, the central bank has once again cut the reserve requirement ratio by 1 percentage point. The deputy governor of the central bank also said that a full evaluation is required before the deposit benchmark interest rate is used. This shows that domestic monetary policy is precisely making efforts to support the real economy. , fully consider the impact of policy signals on market expectations. China’s manufacturing purchasing managers’ index (PMI) rebounded sharply to 52 in March, indicating that the pace of resumption of work and production of domestic companies has accelerated significantly.
According to calculations by the National Cotton Market Monitoring System, as of April 3, a total of 5.795 million tons of seed cotton and lint cotton had been sold across the country, a year-on-year decrease of 226,000 tons; a total of 5.752 million tons of lint cotton had been processed, a year-on-year decrease of 170,000 tons. The processing rate was 99.3%; the cumulative sales of lint cotton nationwide were 3.558 million tons, a year-on-year decrease of 63,000 tons, and the sales rate was 61.9%. The latest report from the U.S. Department of Agriculture shows that the U.S. cotton planting intention fell by less than 1% year-on-year, which is lower than market expectations. The supply pressure on international cotton prices has increased. This week, most textile companies’ orders for the year have been delivered. Due to foreign The epidemic has led to a decrease in new export orders, a slight increase in cotton yarn inventories, coupled with the lack of significant improvement in domestic terminal consumption, and the coexistence of upstream and downstream pressures. It is expected that the cotton price outlook will remain difficult to be optimistic before the global epidemic reaches an inflection point. </p
