From November 15th to 19th, the cotton market was basically stable, with spot prices firm and futures prices fluctuating within a narrow range. The long and short markets were temporarily in balance.
Recently, the inquiry and transaction activity of hand-picked cotton in southern Xinjiang has increased, and the quotation of “Double 28” hand-picked cotton is 23,000-23,300 yuan/ton. A large number of new flowers are on the market, coupled with the continuous release of reserve cotton every day, the market supply has increased significantly, but the spot price has remained stable without significant fluctuations. As the delivery time of Zheng Cotton’s January contract approaches, the focus of market funds gradually shifts to the 2205 contract. At present, professionals believe that at a time when a large number of new flowers are on the market, sliding tax quotas will also be issued one after another. Both the supply and inventory of new flowers are very sufficient, and the market’s long power is obviously weak. Of course, it is unrealistic to expect cotton prices to fall significantly when spot price support is strong. As for whether the market can make up for the gap that jumped short and opened high, the market is also controversial. In the near future, there is no condition and opportunity to make up for it.
The downstream market is now relatively pessimistic, with insufficient cotton yarn orders and large downstream gray fabric inventories. According to cotton yarn traders, due to the sluggish end consumer market, cotton yarn prices have dropped slightly, destocking has been slow, and the operating rate of weaving mills in some areas is less than 50%. Different from the pressure on inventory in one link of traders, especially when sales are not good, textile companies have inventory pressure on both raw materials and finished products. In the future, as the operating rates of India, Pakistan, Vietnam and other countries pick up, firstly, the number of foreign orders returning to China will decrease, and secondly, the entry of foreign yarn will have a certain impact on the domestic cotton yarn market.
Therefore, last week, under the conditions of a large number of new flowers on the market, sufficient industrial and commercial stocks, and continuous release of reserve cotton, cotton supply was sufficient, but consumption was temporarily under pressure, and cotton prices remained weak and volatile. </p
