Xinjiang cotton market deadlock cotton spot price decline is limited

Most of the seed cotton in Xinjiang has been harvested in 2018/19, and only sporadic seed cotton remains in South Xinjiang. Due to the influence of frost weather, the clothes and colors at the end of the period are not as good as the seed cotton at the earlier stage, and the quality decline is accompanied by a decrease in the purchase price. Recently, the mainstream price of seed cotton purchased by ginning mills is 5.9-6.4 yuan/kg (clothing percentage 34-38%). The ginning enterprise purchased the cotton at the price of quality. It is expected that the whole seed cotton harvest in Xinjiang will be completed by the end of this month.



At present, most of the ginning enterprises in Xinjiang are mainly engaged in production and processing. As of December 12, the cotton processing volume in Xinjiang reached 3.98 million tons in 2018/19, of which 1.28 million tons were processed by the Corps and 2.7 million tons were processed locally. With the increasing processing capacity of new cotton, the purchase and sale of Xinjiang market has been relatively cold.



There are two main reasons why the purchase and sale of Xinjiang market has not improved. First, under the condition of high terminal inventory and low consumption of domestic downstream enterprises, the willingness to continue replenishing warehouses is not strong. In addition, because most downstream textile enterprises are located in the mainland, the replenishing of raw cotton by low-inventory enterprises is preferred by the inland warehouse resources. In addition, the future trend is not yet clear, the mainland traders operate cautiously, and the purchase time of Xinjiang cotton has been delayed again and again, which to some extent restricts the cotton sales in Xinjiang. 2. The processing cost of newly processed high-quality cotton in Xinjiang is high, and the current sales are not profitable. Especially in the southern Xinjiang region, the price of hand-picked cotton is inversely linked to the cost, and the sales willingness of production enterprises is low. Some enterprises feedback, sales are not conducive, have to & ldquo; hard resistance & rdquo; and continue to wait and see.



In addition, the recent financial pressure of enterprises in Xinjiang is not as great as rumored. It is known that loans to ADB are mostly made by large enterprises, small enterprises are mostly borrowed by local banks or self-financing, and some enterprises are developed through large enterprises in Xinjiang. The repayment cycle is not always at the end of the year. Only some enterprises need part of their capital to settle labor costs before the end of the year. Gold. The market is depressed, the mindset of the traders is rather dim, fearing that prices will continue to fall in the later period. Individual enterprises arbitrage high-quality resources through futures registered warehouse receipts, or sell low-quality resources at a low price to balance profits.



At present, Xinjiang will continue to maintain a stalemate, spot prices supported by cost have limited space to fall. In the latter period, the demand-side inventory declined continuously, and when the market good news appeared, the price of Xinjiang cotton might rise significantly when the positive factors resonated.