Recently, the Sino-US trade negotiations have begun, and the Huawei incident has taken a turn for the better. I believe that nothing can be achieved until we strive for it. At present, from the point of view of the decline of reserve cotton stocks and the unexpected global output, it seems that the pace of spring is near, but the phenomenon of high inventory and huge warehouse receipt pressure in the downstream still exists, which makes the expected market of cotton enterprises look far away. What is the situation of cotton market at home and abroad under the current situation?
Domestic cotton market has warmed up slightly
In Tangshan District of Hebei Province, there was a general snowfall. The temperature dropped to the lowest level since winter, the highest temperature dropped to minus 5-7 degrees Celsius, and the lowest temperature dropped to minus 15-17 degrees Celsius, which had a certain impact on cotton purchase.
According to the local cotton farmers, the number of purchasers in the countryside increased last week compared with the previous week. The selling price of seed cotton was 3.2-3.3 yuan/kg, which was basically the same as the previous week. It is understood that last week, a local cotton enterprise sold about 60 tons of lint cotton, up from the previous week, increasing the confidence of cotton enterprises in acquisition. Although cotton enterprises generally believe that downstream textile enterprises will concentrate on purchasing new cotton at the end of the year, lint sales prices may rebound slightly, but still not optimistic about the future market, seed cotton acquisition is still cautious.
At present, because the price of seed cotton has remained unchanged for a long time, cotton farmers gradually recognize the present delivery price of seed cotton. With the approaching of 2019, most cotton farmers are willing to sell at & ldquo; New Year's Day & rdquo; left and right. It is expected that the sale of seed cotton will reach a small peak in the middle and late of this month.
Xinjiang cotton processing enterprises reflect that lint turnover has improved in the past two days. According to the survey, the current turnover is concentrated in & ldquo; one high one low & rdquo; the upper one is not the overall warming up. On the one hand, due to the continuous rebound of Zheng cotton, the delivery price of high-quality machine-picked cotton has been higher than the spot price, so the base purchase of traders shows a restorative growth; on the other hand, low-quality cotton or non-conforming to the conditions for generating futures warehouse receipts is gradually listed, and cotton processing enterprises are eager to cash in, so the quotation is very attractive to enterprises spinning medium and low count yarns.
December 11-12, a factory in Kashgar 3128/3127 grade or no main grade, breaking specific strength 25.5-26.5 cN/tex, containing 1.2% or more impurities, hand-picked cotton gross weight quoted 14600-14700 yuan/ton, while in Xinjiang 3128 grade or no main grade, breaking specific strength lower than 26.5 cN/tex machine-picked cotton gross weight quoted 14200-14500 yuan/ton.
International cotton market continues to be depressed
According to the cotton traders in Qingdao, Zhangjiagang, Guangzhou and other places, except a small amount of Australian cotton and Brazilian cotton, the bonded warehouse has sold out since December, while Indian cotton, American cotton, West African cotton, black cotton and other cotton producing areas have less inquiries and less shipments, and the whole foreign cotton spot continues to be cold and depressed.
Recently, there are more and more low-grade American cotton quotations. The basis difference of EMOT41-4-36 shipped in the first quarter of next year is 685-875 points, the base difference of SLM light dirty cotton 1-1/8 is 250 points, the GCM level and above quotations are few, basically in C/A area or lint, the base difference of EMOTGC31-3-36 is 1100 points, and that of C/AGC21-3-37 is 1400 points.
In contrast, the base difference of Australian cotton SM1-5/32 is 450 points higher than that of American C/AGC21-3-37, 750 points higher than that of EMOTGC31-3-36 and 1165 points higher than that of EMOT41-4-36. Although the output of Australian cotton is expected to decrease dramatically in 2019, the stock of Australian cotton is still very high in 2018, and nearly 450,000 bales of Australian cotton in Qingdao Free Trade Zone have not been sold.
India and Pakistan have some uncertainties. Unofficially, Pakistan's cotton production is expected to decline by 8% year on year, and India's cotton production by 12%. Indian cotton prices are still very competitive, and it is expected that Indian cotton will be oversold by the third quarter of 2019.
Although the main contract of ICE cotton period weighs 80 cents/pound and bonded cotton stocks stop rising and falling, traders continue to increase the sales of foreign cotton quoted in US dollar and RMB. In June/July & ldquo; rush to Customs & rdquo; in 2017/18, the transaction price of EMOT/MOTSM1-5/32 fell below 16,000 yuan/ton (net weight); the consistency is slightly poor, and the breaking strength is lower than 29 GPT. The delivery price of Australian cotton port also dropped to 16,800 yuan/ton. About.
Industry insiders analysis, on the one hand, according to the usual practice in late December, the relevant ministries and commissions will issue a 1% tariff import quota of cotton (894,000 tons) in 2019, not only the quota transfer, rental price decline, but also the clearance volume of cotton outside January and February will increase significantly; on the other hand, at the end of recent years, the cash flow pressure of traders and cotton textile enterprises will rise to varying degrees, & ldquo; survive & rdquo; become part of cotton enterprises. As a matter of urgency, the phenomenon of dumping is becoming more and more common.
In summary, cotton production in many countries will be lower than expected, as in China, India and Pakistan. The reduction of cotton production in Xinjiang may mean that the reserve cotton will resume rotation in March next year. The decreasing stock supply of reserve cotton will lead to the resumption of imported cotton in China. Therefore, import demand will increase in the later period, especially for high-grade cotton, which will provide support for international cotton prices at a certain level. But in general, the future cotton market is interwoven with many empty factors, which is really & ldquo; half sea water, half flame & rdquo; enterprises should make reasonable business planning according to their specific conditions, and the rest may only be time to reveal the final answer!
