Since mid-October, ICE cotton futures have experienced the second wave of rapid rise this year, while domestic Zheng cotton futures rose briefly and then fell back, and the price difference between domestic and foreign cotton has narrowed significantly. At the same time, from October to November, the state continued to arrange the release of cotton reserves in 2021, adjusted the bidding floor price of real estate reserve cotton, and increased the release of imported cotton. At the same time, the imported cotton textile special sales of China Cotton and China Textile increased the supply of foreign cotton. Therefore, bonded cotton sales at ports have slowed down in recent weeks. According to data compiled by the National Cotton Market Monitoring System, as of early November, the uncleared foreign cotton inventory at the port was around 280,000 tons.
1. The price difference between domestic and foreign cotton has narrowed, and the national regulation has achieved obvious results
After the National Day, Zheng Cotton Futures prices have risen sharply due to speculation, while the external price has fallen significantly after a rapid rise in the early stage. The price difference between domestic and foreign cotton prices once widened to more than 2,500 yuan/ton. Beginning in late October, ICE cotton futures experienced a second consecutive surge this year after a short break. During the same period, Zheng cotton futures fell back under the influence of the country’s continued regulation. By early November, the price difference between domestic and foreign cotton fell back to less than 1,000 yuan/ton. . The continued release of reserve cotton and the adjustment of the auction floor price have effectively stabilized the domestic market. Considering that the state’s efforts to regulate the market remain unabated, the domestic market has sufficient spot resources for all types of cotton, and the international market remains strong, it is expected that the price difference between domestic and foreign cotton is likely to stabilize at the current level or continue to narrow in the future.
2. Foreign cotton stocks at ports decreased slightly and optional resources were scarce
From mid-October to November In the first ten days of this month, cotton stocks at ports continued to decline. The widening price gap between domestic and foreign cotton in the early period caused foreign cotton stocks in China’s major ports to continue to decline. Entering November, the price difference between domestic and foreign cotton has narrowed, and there is not much left in the 1% tariff quota. Bonded high-grade Brazilian cotton, American cotton, West African cotton and other resources continue to decrease. Cotton-using companies do not have much choice. Bonded cotton customs clearance at ports Progress slows. According to data from the National Cotton Market Monitoring System, as of the first week of October, the foreign cotton bonded inventory statistics at major ports are as follows:
Qingdao Port 200,800 tons, compared with 219,200 tons in the same period last month tons, including 39,000 tons of Brazilian cotton, 32,000 tons of Indian cotton, 21,000 tons of US cotton, 18,700 tons of Australian cotton, 2,500 tons of Central Asian cotton, 3,200 tons of West African cotton, Mexico, Sudan, Israel, Egypt, Greece, etc. A total of approximately 9,400 tons.
Zhangjiagang 50,000 tons, 60,000 tons last month, mainly American cotton, Brazilian cotton, Indian cotton and African cotton
Nantong Port 25,000 tons, 30,000 tons last month, mainly US cotton, Brazilian cotton, Indian cotton and African cotton
No data for Wuhan Port yet
No data for Yueyang Port yet
3. Textile enterprises’ orders and purchasing intentions
According to market feedback, with the improvement of the overseas epidemic situation, the return of orders from textile enterprises is accelerating, and Christmas supplements The orders have basically ended, and it is expected that foreign trade orders will be difficult to pick up before the Spring Festival. Currently, textile companies can accept few medium- and long-term large orders, while short-term orders have low profits. A recent survey by the National Cotton Market Monitoring System shows that the current order situation of yarn mills is generally declining, and the situation of downstream cloth mills is similar, and sales are even worse. According to the survey, the sharp increase in raw material costs is the most prominent problem currently faced by enterprises. It is difficult for the enterprises themselves and downstream terminals to digest it. The mentality of raw material procurement is to buy as you use or buy at a lower price. In addition, sea freight rates have only declined for US routes, while there has been no change in Europe and other regions, and costs remain high. Considering the above situation, cost-effective reserve cotton is still the first choice for textile enterprises to replenish their stocks.
Towards the end of the year, cotton import quotas are about to expire. Importing companies will also pay close attention to foreign market conditions, bargain for low prices, and use up their quotas as much as possible. However, until a large number of new US cotton flowers are launched and port shipping problems are alleviated, the resources available to textile companies are limited, and the quantity of foreign cotton arriving at the port will also be limited, and bonded cotton stocks may maintain a slow downward trend. </p
