According to feedback from cotton trading companies in Zhangjiagang, Qingdao and other places, in recent days, not only the inquiries and transactions of shipments and bonded cotton quoted in US dollars have rebounded compared with the first and middle of April, but customs clearance of Brazilian cotton, US cotton, Indian cotton, West African cotton Cotton and other shipments also gradually recovered slightly, and the market sentiment bottomed out and reversed.
Judging from the quotations of foreign merchants and importing enterprises, the basis of RMB quotations for foreign cotton at FOB, CNF and ports has generally stabilized this week, with most of them not being adjusted. The basis of US cotton EMOT M 1-1/8 for the April-June shipping period at Qingdao Port is 7.75-8.5 cents/pound (ICE2107+basis); the basis for the Brazilian cotton M 1-1/8 for the April-May shipping period The basis difference of Indian cotton M 1-5/32 for April-May shipment is stable at 3-3.5 cents/pound.
A cotton trading company in Qingdao said that the import market since mid-April has shown the following characteristics: First, there is relatively little spot Indian cotton that has been cleared at the port. Although most traders quote bonded cotton prices in RMB (fixed price, Basis quotation), but the buyer is required to bring his own cotton import quota within 1% for customs clearance (there is room for negotiation on the transaction price); second, not only the 2020/21 and 2019/20 will arrive at China’s main ports for delivery and storage in March The annual quantity of U.S. cotton is relatively large, and the quotations for U.S. cotton resources for the April/May/June shipping dates are also very sufficient. It is expected that port inventory pressure will not be significantly improved in the second and third quarters.
For more than a week, the reasons for the gradual improvement in foreign cotton transactions are generally analyzed in the industry as follows: First, as the CF2109 contract broke through multiple barriers, domestic cotton spot quotations rose accordingly, and the price difference between domestic and foreign cotton increased. Expansion; secondly, it is more difficult for some cotton textile enterprises to obtain loans, and capital flow is somewhat tight. Using LC90 days can not only lock in medium and high-quality cotton resources in advance, but also reduce the financial pressure of raw materials; thirdly, the recent sharp appreciation of the RMB against the US dollar, foreign cotton Import costs have dropped significantly. In just 7 trading days, the offshore RMB exchange rate against the US dollar rose by 1,000 basis points, and regained the important mark of 6.5. The magnitude and speed of appreciation were very violent and rare, stimulating shipping schedules and bonded cotton imports. </p
