SunSirs: The Market Returns to Rationality, and Chinese Cotton Prices Continue to Fall (11.1-11.10)

According to statistics from SunSirs, as of November 10, the average domestic lint spot market price was RMB 14,470/ton, a decrease of RMB 150/ton or 1.02% from the price on November 1, and it was up 10.81% year-on-year. Cotton prices experienced a soaring in October. After domestic orders were quickly digested in September and October, the market transactions also gradually became deserted. In early November, international cotton prices began to callback.

The October order transfer benefit may be overestimated. According to the statistics of the General Administration of Customs. my country's textile and apparel exports amounted to 24.845 billion US dollars, down 12.45% from the previous month. Among them, the export value of textiles (including textile yarns, fabrics and products) was 11.661.7 billion U.S. dollars, down 11.33% from the previous month; the export value of clothing (including clothing and clothing accessories) was 13.183 billion U.S. dollars, down 13.41% from the previous month. Although there are factors such as exchange rate effects and delays in delivery of goods, they still poured cold water on the market. The dividends of foreign orders were also given to some textile enterprises. After a short period of uplift, the cotton market fell and adjusted.

Last week, the Zhengzhou cotton main contract 2101 contract reported 14372 yuan/ton, down 133 yuan/ton, or 0.9% month-on-month, while ICE cotton fell below 70 cents/lb, down 0.79 US cents or 1.1% month-on-month. . The biggest drop was Indian cotton, which fell 522 yuan/ton, or 4.0%. The competitiveness of the domestic cotton market declined, and the price difference between domestic cotton and imported cotton was 1,762 yuan/ton, an increase of 362 yuan/ton from the previous month.

International cotton yarn prices generally fell, with 32 carded yarns falling by 600-886 yuan/ton, of which Indonesia had the largest drop. Cotton yarn prices at home and abroad are also increasing. The price difference of cotton yarn between China and India reached 687 yuan/ton, an increase of 45.6% from the previous month.

SunSirs analysts believe that in November, orders from some small and medium-sized cotton spinning enterprises took a sharp turn, the production and sales situation turned sharply, and the enthusiasm for raw material procurement was no longer before, which formed a certain negative for lint. But on the other hand, most of the traders in the group of traders have achieved clearance or have little inventory pressure, and the quotations are also relatively tough, which actually means that conversations are not hot. Cotton prices skyrocketed in October, and the inventory structure of cotton spinning enterprises was misaligned. Raw material inventories moved down, but terminal consumption did not simultaneously participate. The cotton market entered a stalemate period again. It is expected that the center of cotton price will continue to move downward.

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