According to feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, in the second half of last week, some cotton companies have lowered the RMB resource basis at the port in an attempt to stimulate cotton textile companies and middlemen to take orders and speed up the progress of cotton destocking at the port. However, cotton use Most companies don’t buy it, and inquiries/shipments of customs-cleared cotton and bonded cotton at China’s main ports continue to be light.
A cotton spinning company in Jiangsu said that on the one hand, ICE and Zheng cotton have continued to fluctuate sharply since July, and the market direction is very unclear, and buyers are forced to wait and see; on the other hand, with the recent increase in the amount of US cotton, Australian cotton, etc. arriving in Hong Kong, The amount of foreign cotton resources cleared through customs has also increased significantly. Some small and medium-sized cotton traders feel that the sales pressure is too high, and the basis reduction and cargo-running operations may have just begun. In addition, regardless of the direct import cost of US cotton/Brazilian cotton/Australian cotton under the 1% tariff or the RMB quotation of customs-cleared foreign cotton at the port, the price range of Xinjiang cotton in the mainland is still very prominent. In addition to rigid demand, the competitiveness of foreign cotton is weak.
Judging from the quotations of some traders, the fixed price of US cotton 31-3/31-4 36/37 (strong 28-30GPT) cleared by Qingdao Port from July 17 to 18 is concentrated at 20,900-21,300 yuan/ton (the quotations are relatively confusing, The price difference even reaches 800-1,000 yuan/ton); the customs-cleared Brazilian cotton M 1-5/32 (strong 28/29GPT) has a fixed price of 20,400-20,900 yuan/ton, and the price difference with US cotton of the same quality has narrowed compared with the previous period. The quotations of US cotton and Brazilian cotton are still much higher than the quotations of Xinjiang machine-picked cotton in the “Double 29” warehouses in Shandong, Jiangsu, Henan and other warehouses. The recent port customs clearance of Indian cotton stocks in 2020/21 and 2021/22 has continued to decline. In addition, the correction of domestic cotton prices in India has been significantly weaker than that of ICE/Zheng cotton. Therefore, traders have shown a certain resilience. At present, The fixed price of Indian customs cleared cotton M 1-5/32 is about 19,000-19,500 yuan/ton, and the bargaining space is relatively low.
It is also understood that as the 2021/22 US cotton enters the middle and late stages of shipment and delivery, cotton resources of various grades and quality indicators are available. There are not a few without main grades, high impurity content, and low horse value. Therefore, buyers need to look at large quantities of goods, conduct random inspections, and negotiate contract prices.
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