According to feedback from several cotton textile companies and cotton middlemen in Jiangsu, Shandong, Henan and other places, due to the sharp decline in ICE cotton futures in the past week or so, cotton companies have relatively large differences on the trend of ICE in September/October, and various cotton merchants have different inventories. There are differences in capital flows, so the quotations for bonded US cotton/Brazilian cotton/African cotton/Indian cotton at the port are more confusing than those on 7/8, which makes buyers feel more headaches. Not only do they need to compare quality indicators, but they also need to make large-scale inquiries. , to filter.
From September 5th to 6th, the “fixed price” of bonded US cotton 31-3/31-4 37 (strong 28/29PT) in Qingdao Port ranged from 129 cents/pound to 137 cents/pound, with a price difference of nearly 8 cents. cents/pound; while the “fixed price” of bonded Brazilian cotton M 1-5/32 (strong 28GPT) is as high as 132-140 cents/pound, and the price difference between high and low is also about 8 cents/pound.
The reason for the current upside-down quotation of bonded Brazilian cotton and US cotton is mainly that Brazilian cotton is new cotton in 2021, while the spot US cotton at the port is mostly old cotton in 2020/21 and 2021/22. There is a downgrade of US cotton. In addition, up to now, the supply of US cotton bonded and customs clearance stocks in China’s main ports is relatively sufficient, and Brazilian cotton generally has “high quotations, low transactions” and other situations. Therefore, the “fixed price” of Brazilian cotton has temporarily surpassed that of US cotton.
Judging from the survey, driven by the ICE cotton futures falling by two consecutive limits on September 1-2, and the main contract falling by more than 10% since the end of August, domestic cotton textile companies and middlemen are not only more cautious in purchasing, but also have a more cautious attitude towards mid-to-late August. High-priced contracts signed include delays in delivery and performance (some buyers ship an order in multiple batches), or even negotiate to cancel the contract. A cotton company in Changzhou, Jiangsu Province said that ICE has plunged significantly, and traders’ performance has been “one pot of porridge”. Some companies, due to relatively low bonded/customs clearance cotton stocks and relatively sufficient cash flow, have directly closed the market without making external quotations, and are holding the goods for sale. The sentiment is relatively strong; some companies have significantly reduced the “fixed price” and adjusted to basis sales, hoping to speed up cotton shipments and clear positions as soon as possible; although some companies quoted prices, the adjustment range was significantly lower than that of ICE futures, showing a very Strong resistance to falling. Overall, ICE fell back to the 100-105 cents/pound range, and the trend of buyers being cautious and sellers pushing prices has not changed.
</p
