The cotton market in 2021 can be described as ups and downs. After experiencing a bull market in cotton, cotton fell by as much as 9% in a single month in March. The current cotton market is facing a situation where textile companies are expected to have less orders in May, and there is a price competition between upstream spinning companies and downstream fabric companies. From February when everyone was scrambling to grab goods to the current situation of being “deserted”, the market has been changing rapidly and is unpredictable.
Price increase! Zheng Cotton rose by more than 400 yuan/ton in two days
Recently, the performance of the cotton futures market has been mediocre. Affected by this, the cotton and cotton yarn spot markets have a poor mentality. On April 15th, Textile People’s circle of friends suddenly became excited!
The painting style is like this.
Every step in the futures market is important to the market mentality. Market participants always pay close attention to the performance of the futures market.
Following Zheng Mian’s 2105 plate on April 15 After China broke through the Wanwu mark, on April 16, Zheng Cotton 2105 rose sharply by 215 yuan/ton, closing at 15,195 yuan/ton, rising by more than 400 yuan/ton in two days, and polyester staple fiber futures closed at 6,986 yuan, showing a stop of decline. Stabilize the situation. Cotton yarn 2105 rose by 240 yuan/ton, closing price was 22870 yuan/ton.
Picture: The futures market on April 16 Changhong
On April 16, the price of domestic cotton spot 3128B increased by 198 yuan/ton to 15,551 yuan/ton, an increase of 182 yuan/ton from April 9. tons, an increase of 305 yuan/ton from March 31.
Friends in the circle of friends who are engaged in textile industry were moved by the news, and their willingness to ship suddenly increased a lot.
The cotton futures market rebounded, why?
The recent rebound in the cotton futures market is closely related to several factors.
First, the weakening of the US dollar increases commodity prices. The US dollar index fell sharply again this week, which led to a collective surge in the commodity market. At the same time, the “boycott of Xinjiang cotton” incident was negative. The impact has come to an end for now. The latest U.S. cotton USDA report is positive. The report shows that global opening stocks and production in 2020/2021 decreased month-on-month and consumption increased.
Compared with the previous year, the gap between China’s domestic cotton production and demand this year expanded by 1.03 million tons to 2.28 million tons. Coupled with the dry weather in Texas, which was unfavorable to US cotton planting, US cotton rebounded rapidly on April 15. On April 15, ICE futures rose again, with the May contract at 85.02 cents, an increase of 82 points. Boosted by foreign cotton prices, the domestic futures market rebounded rapidly this week. In addition, data released on April 15 (Thursday) showed that U.S. clothing retail sales surged 18.3% in March, supporting expectations that cotton market demand will continue to grow.
Second, the domestic economic situation has made a good start. In the first quarter of this year, China’s GDP in the first quarter was 24.931 billion yuan, a year-on-year increase of 18.3%. “Report Card” highlights the long-term positive trend and enhances textile people’s confidence and expectations for economic development and market vitality throughout the year. In the first quarter, the total retail sales of consumer goods increased by 33.9% year-on-year. The growth data of the consumer market convinced us that the trend of consumption recovery has not changed. Youdao believes that “the beginning determines the overall situation”, and the first quarter has laid a good foundation for the whole year.
(Source: Central Commission for Discipline Inspection and State Supervision Commission Website, Zhang Han)
Recently, major international institutions have raised their expectations for China’s economy. The International Monetary Fund predicts that China’s economy will grow by 8.4% in 2021, an increase of 0.3 percentage points from the January forecast. The World Bank predicts that China’s economy will grow by 8.1% in 2021.
Textile and apparel exports increased significantly in the third and first quarters, boosting Zheng’s cotton market. In the first quarter, both textile and clothing exports achieved substantial growth. From January to March 2021, textile exports were US$31.81 billion, an increase of 40.3%, and clothing exports were US$33.29 billion, an increase of 47.7%.
In March, textile and clothing exports were US$18.92 billion , an increase of 22.6%, of which textile exports were US$9.67 billion, an increase of 8.4%, and clothing exports were US$9.25 billion, an increase of 42.1%.
In addition, at present, the mainstream quotation of viscose staple fiber is 14,800 yuan/ton, and the price of cotton exceeds the viscose price of 751 yuan/ton. This price ratio of cotton to viscose is also Supporting the high and volatile operation of cotton prices, cotton prices may still have room to rise.
Some netizens commented that cotton will rise:
What needs attention in the near future is cotton imports Regarding the quota issue, although the rumored 2 million tons of cotton quota in the market has “noses and eyes”, 2 million tons is a bit unbelievable when you think about it. After European companies boycotted Xinjiang cotton, resulting in a supply gap in imported cotton, such rumors may have appeared in the market. In order to comfort these companies that are troubled by the short-term shortage of imported cotton. After the Xinjiang cotton incident fermented, out of nationalIt is unlikely that the quota of 2 million tons of imported cotton will be issued immediately. Considering the quota of more than 800,000 tons over the years and the expectations of my country’s export market, there is a high probability that the quota will be within 1 million tons.
How much more can we expect from “Gold, Three, Silver and Four”?
The sharp rise in cotton and cotton yarn prices in the early stage led to low downstream acceptance. From mid-March to mid-April, cotton prices rose and fell. All gains have been given back, textile and clothing orders are not optimistic, and demand in the “Gold, Three, and Silver” peak seasons has been overdrawn in advance.
It is understood that since mid-March, some textile companies and weaving factories have experienced “production exceeds sales”, but the inventory accumulation rate is not high. China’s yarn inventory reported 13.7 days on April 15, while gray fabric inventory reported 22.3 days. Although the yarn market is weak, spinning profits are as high as 1,000-2,000 yuan/ton.
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In terms of the impact of the “Boycott of Xinjiang Cotton Incident”, According to reports, the main impact is on large textile factories and foreign trade enterprises, mainly focusing on medium and long-term orders, while most small and medium-sized yarn mills and weaving factories report that they are hardly affected.
The inventory of some varieties has increased significantly, the willingness to purchase raw materials is not strong, and the market has a strong wait-and-see sentiment.
According to corporate reports, most textile companies currently have orders until the end of April. The domestic sales market is better than the export market. There are few new domestic downstream orders, and their sustainability remains to be seen. It is observed that downstream yarn orders are mainly purchased on demand, and the market is currently waiting for autumn and winter orders to be issued.
The epidemic has rebounded significantly abroad, especially in Southeast Asian countries. According to reports, the number of confirmed cases in India has reached 14 million, ranking second in the world. , second only to the United States, many places have restarted blockade measures, which has affected Indian textile production. If the rebound of the epidemic in Southeast Asia intensifies, overseas orders similar to last year may return to China again. April is already halfway through, and May Day is just around the corner. The market is paying attention to the consumption performance of the May Day Golden Week. At present, the national vaccination is in an orderly manner. If there is no sudden Due to the outbreak of the epidemic, the release of May Day consumption may increase market confidence just like the National Day consumption in October last year, injecting confidence into the domestic textile and clothing market.
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