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SunSirs: Chinese Spot Cotton Continues to Rise
July 09 2020 08:56:42SunSirs(Linda)

According to SunSirs data statistics, as of July 7, Chinese cotton lint spot market average price was reported to be 12,098 yuan/ton, which was an increase of 182 yuan/ton or 1.52% from July 1, and a decrease of 2,224 yuan/ton or 15.53% year-on-year. %. The central reserve cotton wheel started on July 1. It is worth noting that when the spot price index of cotton in Chinese market is lower than 11,500 yuan/ton, the round will be suspended.

As of July 7, the average transaction price of reserve cotton rounds was 11,533 yuan/ton, an increase of 394 yuan/ton from the beginning of July, an increase of 3.54%; the price of 3128B was 12,835 yuan/ton, an increase of 286 yuan/ton from the beginning of July, The increase was 2.28%. The current Chinese price increase is similar, and the increase is not as good as that of reserve cotton. From the 100% turnover rate of the reserve cotton in the first week, the market enthusiasm is rising, and the reserve cotton is favored. Even if there is a lot of goods in the stock market, the price increase continues.

According to SunSirs data statistics, as of July 7, the average price of cotton yarn for 32S ring spinning and knitting in Shandong was reported at 20,500 yuan/ton, down 375 yuan/ton from the previous month, a decrease of 1.80%. Last week (6.28-7.3), foreign cotton yarn prices continued to operate weakly, while domestic and foreign yarn prices continued to operate weakly. The price difference between yarn and cotton is basically stable, with the exception of Indonesia. The price of domestic cotton yarn is 160-750 yuan/ton higher than that of foreign yarn. Because the current round of reserve cotton can meet the production needs of enterprises, the cost is controlled, and the enthusiasm for textile companies is high. Secondly, a large number of textile enterprises have transformed into domestic trade, the market competition is fierce, and prices have been suppressed. As a result, India, Pakistan, and Vietnam's cotton yarns, which are cleared by traders, have dropped in price. The demand side is difficult to improve, and the cotton yarn spot resistance is relatively large.

SunSirs analysts believe that the round of reserve cotton seems to have made a bottom for the spot, the lowest price does not seem to fall below 11,500 yuan / ton, the market is full of expectations. However, in the face of the downturn in the downstream market, it is still necessary to rationally view the rise in cotton prices. First, in March, the National Development and Reform Commission announced that the Xinjiang cotton target price for 2020 will be 18,600 yuan/ton, but in fact, the market cannot accept such prices in the first half of the year. Spot and futures mostly fluctuated at 1,100-12,000 yuan/ton. There is a gap between reality and ideal. Second, the spot stock is lower than the reserve cotton, but the turnover rate of the reserve cotton is 100% in the first week. The side shows that the reserve cotton is cost-effective and textile companies are competing for the auction. Third, there are still variables in downstream demand, and cotton is currently weak to rise. At present, downstream overseas orders are affected by the overseas epidemic situation and the domestic sales market is weak. However, due to the hot sales of cotton reserves, it is expected that cotton prices will maintain a small upward trend.

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