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SunSirs: Chinese Lint Spot Price is not Strong
May 27 2020 09:56:53SunSirs(Linda)

According to SunSirs data statistics, as of May 26, the average Chinese lint cotton spot market price was 11,850 yuan / ton, an increase of 291 yuan / ton from last Tuesday, an increase of 2.51%, and a year-on-year decrease of 19.03%. Last week, the European pandemic has eased but the Americas situationc has not been effectively controlled. A series of recent US operations have increased the risk of Sino-US trade relations, and the international trade environment is not optimistic. The market is generally short-term bearish, and cotton prices are lower.

Last week (May 18-22), Chinese cotton prices rose 384 yuan / ton, an increase of 3.33%, while imported cotton fell about 50 yuan / ton last week. Chinese lint spot has continued to rise; Zhengzhou cotton made a turning point on May 20. The US cotton export weekly data was unsatisfactory. The market is more concerned about the trend of Sino-US relations, and the mentality has changed. Cotton prices rose cautiously, cotton prices callback.

China has signed a contract with the U.S. cotton alone, and it has become mainstream to cancel the contract. According to the US Department of Agriculture report, on May 8-14, 2020, the net contracted amount of U.S. upland cotton in 2019/20 was 29,200 tons, a 46% decrease from the previous week and a 51% decrease from the average of the previous four weeks. From the date point of view, there is a week delay in the release of the US Cotton Export Weekly Data. The 8-14 May release is a sign that Sino-US trade relations are improving. Although China has newly signed 34,800 tons of US cotton,the US approach has caused the market to express concern about this. The market is on a wait-and-see attitude. Zhengzhou cotton's rise is blocked, and the main contract is consolidated at 11,500-12,000 yuan / ton.

According to customs statistics, China imported 140,000 tons of cotton yarn in April 2020, a year-on-year decrease of 26.32%; since 2019/20 (September 2019-April 2020), China has imported 1.24 million tons of cotton yarn, a year-on-year decrease of 4.62%. In April, weaving, apparel, and foreign trade companies were hit hardest by the new crown epidemic, and the consumption demand for gauze declined significantly.

Last week, both domestic and foreign cotton yarn prices have been lowered, with Uzbekistan and India having the largest declines. Uzbekistan's 32S cotton yarn fell weekly by 500 yuan / ton. The average pick-up prices of 32S and 21S cotton yarn ports in India fell by 320 yuan / ton and 410 yuan / ton respectively. Pakistan's downstream cotton yarn returned to work slowly. The demand for cotton yarn was general and the price fell weakly. The domestic yarn price has been lowered slightly, and the price difference between domestic and imported yarn has widened. It is expected that the price of cotton yarn will weaken and adjust.

ICE closed for one day on Monday, and Zhengzhou cotton shocked and consolidated in China. The risk of China-US trade relations has increased, and the market is cautious about the rise. SunSirs analysts believe that the spread between domestic and foreign cotton yarns is widening, and domestic cotton yarns may be further reduced; on the other hand, the yarn cotton price gap is narrowing, yarn costs are increasing, and downstream demand is still in the recovery stage, and it is difficult to support cotton prices. The current gap has widened, and cotton prices are expected to fall.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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