Judging from the feedback from cotton trading companies in Qingdao, Zhangjiagang and other places, the overall inquiries and transactions of foreign cotton at the ports have been relatively light since June. This is mainly due to the inversion of the price difference between domestic and foreign cotton under the 1% tariff, which continues to be at a high level, and new traceable orders exported to the United States/European Union. Unsatisfactory and various factors such as the depreciation of the RMB exchange rate and the continued tightening of credit funds for cotton textile enterprises.
At present, foreign cotton transactions in major ports are mainly based on customs clearance RMB quotation resources (basis transactions or fixed prices). Compared with Brazilian cotton and US cotton, the performance of customs clearance Indian cotton is more active. In addition to its obvious price advantages, customs clearance Indian cotton stocks are mainly based on CCI rotation resources in 2019/20 and 2020/21. The downgrade of lint and the decline in spinnability are not very prominent.
It is understood that on August 4-5, Qingdao Port cleared Indian cotton M 1-5/32 (strong 28/29GPT) net weight quotation at 18,500-19,000 yuan/ton; M 1-5/32 (strong 28/29GPT) Brazilian cotton The net weight quotation is 19,600-20,200 yuan/ton; while the net weight fixed price of US cotton 31-3/31-4 36/37 is 20,000-20,500 yuan/ton (the price difference between customs clearance US cotton and Brazilian cotton has narrowed); and currently Henan, The quotation price of Xinjiang machine-picked cotton on the “Double 29” in Shandong, Jiangsu and other inland warehouses is only 15,600-15,900 yuan/ton, and the domestic and foreign quotations remain high. However, the current price support sentiment of cotton trading companies has not significantly weakened, and there is still little room for price negotiation, especially for orders and short-term orders.
So which cotton spinning companies are purchasing such high-priced customs-cleared foreign cotton? Industry analysis mainly includes the following three types: First, in the second quarter of 2022, textile companies that received traceability orders for export to the United States and the European Union but did not have cotton import quotas or insufficient import quotas directly purchased RMB resources, reducing the need for finding freight forwarders, customs clearance, etc. The second is that under the current 1% tariff, the import cost of U.S. cotton and Brazilian cotton and the RMB quotation of customs-cleared foreign cotton at the port are still upside down by 800-1,200 yuan/ton. Therefore, if the customs-cleared cotton grade, various quality indicators and the export orders of textile enterprises To match, even cotton spinning companies with sufficient 1% tariff quota will choose customs clearance cotton; thirdly, although the current customs clearance cotton and domestic Xinjiang cotton continue to have an obvious inversion, the price of cotton yarn spun with imported cotton is not only significantly higher than that of domestic yarn, but also higher than that of imported yarn. Indian yarn, Vietnamese yarn, Pakistani yarn, spinning companies are slightly profitable, so a few yarn mills do OEM processing for weaving/fabric companies that receive traceability orders.
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