According to feedback from cotton yarn traders in Guangdong, Jiangsu and Zhejiang, etc., since early March, the external quotations of cotton yarn from India, Pakistan, Vietnam and other producing countries have continued to fall, and there are obvious signs of a “late spring cold” in inquiries and transactions, especially Indian cotton yarn. Affected by factors such as the sharp depreciation of the rupee against the US dollar, the sluggish domestic cotton yarn consumption in India and the sharp drop in imported cotton quotations, which led to the decline in cotton mill costs, FOB and CNF quotations have been slightly lowered. Although in the past week or so, the main ICE cotton futures contract has fallen below 62 cents/pound, approaching the 60 cents/pound mark, the quotation of imported “futures yarn” has “fallen again and again”, and domestic downstream weaving, clothing and foreign trade companies have resumed work. The production progress continues to accelerate, but traders are still hesitant and cautious to sign contracts for yarn outside the April/May/June shipping date. Only the demand for C20S-C32S high-quality packaged bleached cotton yarn has gradually recovered (including yarn for knitting, air-jet or rapier) , OE yarns and 8S-16S Siro spinning yarns with better shipments in December/January have both dropped in “volume and price”.
Why are Chinese weaving factories and traders not very interested in signing “futures yarn”? Industry analysis has the following points:
First, with the outbreak of the new coronavirus pneumonia in more than 100 countries, my country’s textile and clothing exports have faced another round of “big test” following the Sino-US trade war. “, the atmosphere of bearishness and worry is relatively strong. A Shanghai foreign trade company stated that in February, customers in Italy, Germany, and Spain first reduced their order quantity by 40%-50%, and then informed them that uncancelled orders would be postponed because the stores were closed, and they were notified of when they would be shipped;
Second, although the resumption rate of downstream enterprises such as weaving and printing and dyeing is relatively high (especially in coastal areas such as Jiangsu, Zhejiang, and Shandong), the proportion of resumption of production is generally low, and since mid-February, they have mainly completed Orders were mainly placed before the Spring Festival, with relatively few new orders, and even fewer mid- to long-term orders;
Third, the collapse of OPEC+ negotiations to expand production cuts and the global economic uncertainty caused by the new crown epidemic With the increase, global consumer demand for cotton, cotton yarn, etc. is facing a significant shrinkage. ICE stocks are at risk of falling below 60 cents/pound or even 58.84 cents/pound, the previous low. Buyers are worried that they are not buying the bottom of yarn prices but the waist or even shoulders. Therefore, I would rather wait and see and take less action. </p
