“The house leaks only when it rains continuously.” When the price of crude oil hit around US$30/barrel, commodity prices at home and abroad opened sharply lower, especially chemical products, which fell by the limit. In such an environment, cotton cannot survive alone. When market pessimism intensifies and oil prices plummet, it is reasonable for cotton prices to fall. The market is still divided on what the price trend will be in the later period.
It is understood that under the dual pressure of the continued spread of the global epidemic and the sharp fall in oil prices, cotton prices at this time The trend has become somewhat deviated from the fundamentals, the supply and demand data have become invalid, and the data reflected in the balance sheet have long been digested by the market. Has pessimism reached rock bottom?
According to the author’s inquiry, under the double negative pressure, many investors have the idea of buying the bottom. Some people think that cotton’s performance today is bottoming again. The reason is that more and more countries Strict isolation and prevention measures have been adopted in response to the epidemic, and the effects of prevention and control are showing. The number of confirmed cases in some countries is declining. There are many people with this kind of thinking at present. After all, the price of cotton in Zhengzhou is already lower than the actual value of cotton, and it is impossible for cotton prices to run below value for a long time. In addition, as domestic textile companies resume work one after another, the demand for cotton raw materials is gradually increasing. At this time, domestic price point orders will also drive the closing of short positions, thus limiting the room for decline.
Of course, there are still quite a few people in the market who continue to be bearish on prices. After all, the global epidemic is still spreading and has not yet reached an inflection point, and domestic textile and clothing is an export-oriented industry. It is inevitable that domestic enterprises will face export pressure. At present, when there is no specific medicine for the new coronavirus epidemic, isolation is the most effective means to prevent the spread of the epidemic. At the same time, isolation will bring short-term stagnation of traditional business, so it is difficult for cotton prices to improve in the short term. In particular, the main markets for China’s textile and apparel exports are Europe, the United States, and Japan, and these countries are hot spots for the epidemic, and the number of new confirmed cases is still increasing.
In addition, there are also views on the volatile trend. They believe that while the domestic epidemic situation is improving, the foreign epidemic situation is still spreading. At this time, the two domestic and foreign markets will hedge to a certain extent.
Although there are still disagreements about the recent trend of cotton prices, in the long run, most people remain optimistic about future cotton prices.
After all, as time goes by, the epidemic will eventually pass, and crude oil prices will eventually reach a new equilibrium state after multi-party games among oil-producing countries. In the future, cotton prices will return to their original levels. The market logic dominated by fundamentals comes up. </p
