According to feedback from cotton trading companies in Zhangjiagang, Qingdao, Guangzhou and other ports, driven by the main ICE cotton futures contract falling below 82 cents/pound on April 12 and the Zheng cotton CF2109 contract opening the 15,000 yuan/ton mark, the domestic cotton textile industry Inquiries and orders from factories and middlemen have gradually picked up compared to mid-April, and the volume of cargo/bonded contracts for Brazilian cotton, Indian cotton, and US cotton has bottomed out.
A medium-sized cotton importing company in Qingdao stated that as of mid-April, the bonded + customs clearance cotton inventory at the port was very large, and some bonded warehouses with good locations, convenient access and reasonable fees continued to be liquidated. The sharp fall in domestic and foreign cotton prices in the same direction has led to accelerated transactions of pending orders and price orders, and increased shipments. The pressure on port inventory is expected to be temporarily relieved. However, considering the April/May/June shipping schedule for 2020/21 Indian cotton, US cotton, The quantity of Australian cotton and West African cotton is still relatively large. In addition, the overall situation of foreign cotton at the port continues to be “less outbound and more inbound”. Therefore, in the second and third quarters of 2021, the pressure on cotton storage capacity in China’s main ports is “easy to increase but difficult to reduce.” “.
Judging from traders’ quotations, Qingdao Port M 1-1/8 (strong 28GPT) Brazilian cotton and US cotton EMOT 31-3 37 (strong 28GPT) are quoted at 15,600-15,800 yuan/ton and 16,250-16,500 yuan/ton respectively; while the “fixed price” of Indian cotton M 1-5/32 in 2020/21 is about 15,300-15,500 yuan/ton (CCI cotton is quoted slightly higher 100-200 yuan/ton), the price difference between Indian cotton and Brazilian cotton has gradually narrowed from 500-700 yuan/ton in February/March to 200-400 yuan/ton, and the competitiveness of Indian cotton has declined. At the same time, due to the continuous increase in the CCI round-out sales floor price, India’s domestic cotton futures performance is strong, and the trend is very different from the ICE market. Therefore, the basis difference of the April/May/June cargo M 1-5/32 Indian cotton is stable at 4.5-5.5 US dollars. cents/pound, while the basis difference of M 1-1/8 Brazilian cotton in the same shipping period is about 6.5-7 cents/pound, and the price difference between the two is only 1-2.5 cents/pound. The cost-effectiveness of Indian cotton has dropped again and again.
Some cotton traders believe that the main ICE contract has plunged from a high of 84.70 cents/pound, to a breakthrough of 82 cents/pound or even approaching the 80 cents/pound mark. On the one hand, there are It is conducive to the transaction of a large number of ON-CALL point-price contracts, and the pressure of ICE’s firm offer is gradually reduced; on the other hand, it stimulates cotton textile mills and middlemen who need to restock foreign cotton to go to bonded warehouses and transit warehouses to view and purchase goods. At present, foreign cotton trading intentions, whether quoted in US dollars or RMB, are getting warmer, but the scarcity of 1% tariff quotas has a greater impact on buyers and sellers. </p
