This week, domestic cotton prices continued to weaken, while international cotton prices first rose and then fell; domestic cotton yarn prices fell, while international cotton yarn prices rose; polyester staple fiber prices continued to fall.
1. Domestic cotton prices continue to fall
This week, Xinjiang seed cotton procurement work has entered the advanced stage. Sales of high-priced new cotton are sluggish, and domestic cotton prices continue to weaken. From November 8 to 12, 2021, the average settlement price of the main contract of cotton futures on the Zhengzhou Commodity Exchange was 21,492 yuan/ton, a decrease of 37 yuan/ton or 0.2% from the previous week; the national cotton price represents the market price of standard grade lint cotton in the mainland. The average B index price is 21,258 yuan/ton, down 320 yuan/ton or 1.5% from the previous week; the Chinese cotton purchase price S index, which represents the average price of white cotton grade 3 seed cotton and lint cotton in the country’s main cotton-producing provinces (regions), is 20,460 yuan/ton. tons, down 6 yuan/ton from the previous week.
2. International cotton prices first increased and then declined
This At the beginning of the week, funds pushed up international cotton prices. As the inflation crisis intensified and hit investor sentiment, the U.S. dollar index rose sharply and international cotton prices fell. From November 8 to 12, 2021, the average settlement price of the main contract of the U.S. Intercontinental Exchange Cotton Futures (ICE) was 114.74 cents/pound, an increase of 0.65 cents/pound or 0.6% from the previous week; representing the main port of imported cotton in China The average price of the International Cotton Index (M) at the CIF price is 130.5 cents/pound, an increase of 0.34 cents/pound or 0.3% from the previous week, and the import cost in RMB is 20,827 yuan/ton (calculated based on 1% tariff, including Hong Kong miscellaneous and freight), an increase of 54 yuan/ton, or 0.3%, from the previous week. The international cotton price is 431 yuan/ton lower than the domestic cotton price, and the internal and external price difference has narrowed by 375 yuan/ton compared with the previous week.
3. Release of cotton reserves to increase imported cotton resources
This week, the first batch of cotton reserves After the release, the second batch of reserve cotton was released and imported cotton resources were increased. Textile companies actively bid and the transaction price increased. From November 8 to 12, 2021, the average transaction price of reserve cotton was 19,116 yuan/ton, an increase of 1,439 yuan/ton, or 8.1% from the previous week; among which, the average transaction price of Xinjiang cotton was 21,619 yuan/ton, an increase of 1,774 yuan/ton from the previous week. yuan/ton, an increase of 8.9%; the average transaction price of real estate cotton was 18,305 yuan/ton, an increase of 1,166 yuan/ton, or 6.81% from the previous week; the average transaction price of imported cotton was 22,967 yuan/ton.
4. Domestic cotton yarn prices fell, while international cotton yarn prices rose
This week, textile companies purchased Willingness for new cotton is generally sluggish, downstream orders have not improved, and domestic cotton yarn prices continue to fall. As the production and sales situation in Southeast Asian countries such as India and Vietnam has recovered, international cotton yarn prices continue to rise. The price difference between domestic and foreign cotton yarn has narrowed significantly, and the competitiveness of imported yarn has declined. Currently, conventional domestic yarn is 124 yuan/ton higher than imported cotton yarn, which is 959 yuan/ton narrower than the previous week. Trading in the gray fabric market was cautious, orders were scarce, market confidence was slightly lacking, and pure cotton fabric prices fell. The price of polyester staple fiber fluctuated and fell with the PTA.
V. Outlook
Inflation The rampant austerity policy has accelerated, and competition in the international textile market has intensified. Global inflation is increasing day by day, and many countries have successively introduced monetary tightening policies. In early November, the Federal Reserve announced that it would start shrinking its balance sheet, the Bank of Canada announced that it would completely end its quantitative easing policy, and Australia announced that it would stop setting a cap on yields. In the international cotton market, data from the U.S. Department of Agriculture showed that 55% of the U.S. cotton harvest was completed last week. According to data from the Pakistan Cotton Processing Association, as of early November, seed cotton sales had increased by 91% year-on-year, significantly exceeding expectations. Australia’s new cotton planting is nearing completion. According to the global production demand forecast released by the United States Department of Agriculture in November, global cotton production will increase significantly in 2021/22, with a year-on-year increase of 8.58%; consumption growth will be relatively limited, with a year-on-year increase of 2.66%. In the international textile market, outflow orders from India, Vietnam and other countries are showing signs of return. The Indian rating agency stated that India’s home textile exports will surge by 20% in the 2022-2023 fiscal year, and the global market share will further increase. The export share mainly comes from U.S. home furnishing retail industry. Supply chain bottlenecks have forced countries such as Europe and the United States to move forward orders, overdrafting consumption this year in advance. In the short term, the number of orders in the international terminal consumer market is limited, global cotton fundamentals tend to be more relaxed, textile and clothing consumer market confidence is weak, and international cotton margins are weakening.
Insufficient domestic demand and the return of foreign orders have put pressure on the domestic cotton market. Data from the National Bureau of Statistics showed that the manufacturing purchasing managers’ index (PMI) fell to 49.2% in October from 49.6% last month, indicating that manufacturing activity shrank for the second consecutive month. According to the deployment of the State Council, small, medium and micro manufacturing enterprises are allowed to defer the payment of some taxes and fees in the fourth quarter of 2021 to promote the smooth operation of the industrial economy. In the domestic cotton market, as new cotton enters the concentrated listing period, the purchase price of seed cotton has gradually dropped to less than 10 yuan/kg. According to data from the National Cotton Market Monitoring System, as of November 12, 2021, the national new cotton picking progress was 86.4%. It is estimated that a total of 2.33 million tons of lint cotton have been processed and a total of 169,000 tons of lint cotton have been sold. The state has begun to release the second batch of 600,000 tons of cotton reserves to meet the structural needs of textile cotton enterprises. Many aspects show that supply is sufficient at this stage. In the domestic textile market, as power restriction measures have been relaxed, although the power-on rate has gradually recovered, yarn demand remains weak, causing price transmission in the industrial chain to be blocked and product inventory to accumulate significantly. The profit margin of textile enterprises has expanded, and profits have continued to narrow. gray clothThe clothing market continues to be sluggish. In the short term, domestic monetary easing expectations have been disappointed, speculation and speculation have cooled significantly, and the domestic cotton market has refocused on fundamentals.
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