The spot price of cotton yarn continued to fall last week. As of December 17, 2021, CY C32S pure cotton yarn closed at 28,180 yuan/ton, a decrease of 120 yuan/ton from last week.
The purchase of new cotton in Xinjiang has basically come to an end, with a daily increase of less than 10,000 tons. Judging from the sales of new cotton, the sales progress of new cotton is at most about 10%. The phenomenon of “difficulty selling cotton” has become relatively common. The main reason is that this year about 1.2 million tons of state-reserved cotton has been thrown out of the market. If Chinatex/China National Cotton Group gets 400,000-500,000 tons of cotton with sliding tariffs Import quotas will almost “accept all” bonded foreign cotton at the port, and at the same time release high-quality foreign cotton from the port to cotton textile enterprises, then the actual total amount of foreign cotton input may exceed 1.5-1.6 million tons, accounting for 1.5 million tons of foreign cotton in China. It accounts for 1/6-1/5 of the total annual cotton consumption, so the power cannot be ignored. However, although the price of new cotton has declined, it is still at a high level. As of December 17, the CC3128 cotton index closed at 21,876 yuan/ton, down 7 yuan/ton from the same period last week. Due to insufficient downstream orders, lackluster transactions, high costs and weak demand, textile companies are not active in replenishing inventories. Some companies are already reducing loads or increasing chemical fiber consumption. Cotton raw material inventories of textile companies have basically remained stable since December. In terms of futures, Zheng cotton futures continued to fluctuate within a narrow range in the first four trading days last week, with intraday increases and decreases of less than 1%, and trading volume was also insufficient. Mainly because the market is relatively flat, downstream yarn mills have insufficient orders, and have little desire to purchase cotton. Investors are also in a wait-and-see attitude and lack confidence in the market. U.S. cotton surged strongly amid positive overnight U.S. cotton sales data and a weaker U.S. dollar, which is good for commodities. On Thursday night, Zheng Cotton surged higher in late trading and remained high and volatile on Friday, rising 325 points or 1.66% in a single day.
In terms of cotton yarn, the yarn market shows no signs of improvement. After the epidemic was discovered last week in Shaoxing, Ningbo, Hangzhou Xiaoshan, Dongguan and other textile powerhouses, the already weak market has become even worse. At present, it is understood that the epidemic has had little impact on the start of work, and no large-scale shutdown has occurred. However, due to the inability of workers to arrive, the load has been reduced. A large cotton mill has reduced its load by about 1/3. At the same time, due to the impact of epidemic control, local transportation has been blocked, making it difficult to send and receive goods, and some regional manufacturers have even suspended work and production. The trading volume of the Foshan market has rebounded slightly recently, which is because some downstream cloth manufacturers need to replenish their stocks before the holiday, but most of them are small batches. It is understood that at present, weaving factories still have no large-scale purchase plans, market orders are still poor, and some businesses have planned to take holidays in advance. Cotton yarn inventories of textile enterprises continued to rise last week. As of the 17th, the average daily inventory of cotton yarn of textile enterprises closed at 29.2 days, an increase of 0.9 days from last week and reaching a high level in nearly four years. The losses of most spinning mills have expanded and their profits have continued to shrink. As of the 17th, the theoretical profit and loss of spinning has reached a deep loss of around 2,300 yuan. It can be said that no matter how happy you were before, spit it out now. Some spinning mills have already Price reduction and destocking behavior.
In terms of outer yarn, in the last week of November, when South African scientists announced the discovery of a mutated virus, panic about the unknown suppressed cotton demand and market sentiment. People are worried that this new mutation will hinder the global economic recovery and reduce the demand for textile cotton. The price of cotton in the international and domestic markets has begun to trend downward, so the price of imported yarn, which was already at a high level, has fallen under pressure. Among them, the Indian yarn market has fallen particularly sharply. Suresh Gupta, sponsor of the Delhi Cotton Yarn Merchants Association, said: “In the past 15 days, the price of cotton yarn in the Delhi market has dropped by about 5% to 10%.” At present, Indian cotton C32S The internal and external prices closed at 27,670 yuan/ton and 3.66 US dollars/kg respectively, down more than 5% from the high in mid-November. However, due to insufficient downstream orders, it is still unknown whether the falling outer yarn market can increase domestic purchases.
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