On March 8, the price of ICE US cotton futures fluctuated and rose in the external market. The main May contract closed at 117.97 cents/pound, an increase of 1.03 cents/pound. The main reason is that the United States announced a ban on importing crude oil from Russia, which caused crude oil prices in Europe and the United States to surge sharply, hitting the highest price since 2008. The rise in external cotton futures has once again boosted the domestic bullish atmosphere. On Wednesday, the main CF2205 contract of Zheng Cotton stood at 21,500 yuan/ton, which gave some hope to manufacturers and middlemen who sold hedging.
Judging from the operating situation of the cotton market in the past two months, spot transactions are difficult and futures are erratic, making it difficult for many cotton-related companies facing losses. As we all know, cotton ginning companies in Xinjiang this year have seen their cotton sales progress significantly slower than in previous years due to the inversion between cotton costs and market prices. Especially in February, which just ended, most cotton ginning companies’ plans to focus on selling cotton after the Spring Festival were shattered. Since March, spot purchases and sales have still shown no improvement. At the same time, facing huge financial pressure, cotton companies’ expected “reasonable” shipping prices seem to be declining. According to some persons in charge of warehousing, logistics and shipping in Xinjiang, the scale of shipping orders received after the Spring Festival is not large, so there are fewer requirements for using fire transportation, and there are relatively few vehicles entering and leaving Xinjiang in terms of automobile transportation. The main reason is the increase in the price of existing gasoline and diesel. The rising costs are also due to the strengthening of epidemic prevention and control in many places in China, and the increase in safeguard measures such as providing nucleic acid test certificates, which will inevitably affect the deployment of manpower and material resources.
In addition, since the launch of new cotton last year, the profits of pure cotton textiles have shrunk significantly compared with blended textiles, and their competitive advantages with pure polyester yarn and rayon yarn have declined. This has led some textile companies to adjust their product lines, and the pressure for substitution has gradually increased. appear. In addition, the foreign trade market boycotts Xinjiang cotton and its products are difficult to sell, and the recovery of domestic cotton market demand is clouded, making it difficult to form an effective connection between the upstream and downstream of the textile industry. For ginning companies, it is still a stone that is difficult to achieve.
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