The Zheng Cotton CF2105 contract has fallen from a high of 17,000 yuan/ton in February to a low of around 14,300 yuan/ton, and its market leading factors have undergone many changes. In the early stage, all parties focused on the benefits brought by the recovery of demand in the cotton textile market during the post-epidemic period. However, as the foreign epidemic situation escalated again and relations between China and the United States and China and Europe tightened, the industry’s view of the market outlook changed.
Recent data released by relevant departments show that the industrial added value of textile enterprises above designated size nationwide increased by 33.1% year-on-year from January to February, and the growth rate increased by 58.7 percentage points compared with the same period last year. The output of chemical fiber, yarn, cloth and clothing of enterprises above designated size increased by 32.5%, 45.9%, 24.1% and 38.4% respectively year-on-year, and the growth rate accelerated by 46.1, 85.3, 60.1 and 75.0 percentage points respectively compared with the same period last year. From January to February, my country’s textile and apparel exports were US$46.1 billion, a year-on-year increase of 55.0%, of which textile exports were US$22.1 billion, a year-on-year increase of 60.8%; clothing exports were US$24 billion, a year-on-year increase of 50.0%.
The above data once again confirmed the early market expectations of improving demand from January to February. Can Zheng cotton rebound again after bottoming out in April? First of all, as the epidemic situation in some foreign areas is still severe, and domestic seasonal orders have come to an end, demand expectations are obviously not comparable to those in the early February; secondly, starting from April, domestic and foreign cotton has been sown one after another, and the market is concerned about the weather at the planting end, cotton planting area, etc. Attention to factors has increased; furthermore, factors such as speculation on quotas and macroeconomic inflation risks will have new impacts on short-term Zheng cotton.
Therefore, when holding a certain position, make relevant analysis and deduction on the negative factors that may occur at present and in the later period, and abandon the idea that “when it hits the bottom, it will rebound, and when it hits the high, it will fall back.” Thinking misunderstandings and look at risks more rationally. </p
