SunSirs: Global Cotton Stocks are Lowered, Chinese Domestic Cotton Prices are Rising, 3128B Lint Increases 4.07% Month-on-Month

1. Price quotes

On the 14th, the price of 3128B lint was around 16,846 yuan/ton, up 285 yuan/ton from last Friday, or 1.72%, and 4.07% month-on-month.

2. Market analysis

The domestic cotton market is rising steadily. On July 14, the average price of China's cotton index 3128B was 16,779 yuan/ton, an increase of 126 yuan/ton from the previous day. Domestically, due to price, quality, flexible procurement and other factors, the cotton reserve is popular with textile companies, and the transaction was completed on the same day. On July 13th, the sales reserve cotton weight was 9552.797 tons, and the average transaction price was 16,506 yuan/ton, which was discounted to 3128B at 17,761 yuan/ton. On July 14, the settlement price of Zheng Mian’s main 2109 contract was 16,700 yuan/ton, up 2.4% from last Friday.

The July global production and demand forecast issued by the United States Department of Agriculture shows that in the year of 2021/22, the global cotton ending inventory will be lowered by 1.6 million bales from the previous month. Global consumption is expected to continue to recover, and the global cotton inventory consumption ratio continues to decline. Therefore, after the release of the report, the US cotton closed up, and Zheng Cotton's price rose accordingly.

3. Downstream industry chain

In terms of cotton spot, the overall purchase willingness of textile enterprises is still weak, mainly for just-needed purchases. In the downstream, with the recent rise in Zhengzhou cotton and Zhengzhou yarn prices, some spinning enterprises raised their yarn prices, but the transaction did not improve. Spinners mainly deliver goods from previous orders and have low spot inventories. They are concerned about the situation of new orders. The enthusiasm of reserve cotton storage shows that downstream demand is acceptable, the market is relatively optimistic, and the global cotton ending inventory reduction is superimposed to support the cotton price market.

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