The 28th is the last trading day. Zheng Mian has seen a correction in the market. In the short term, it has been rising continuously for so long. It needs a decent correction buffer. Only after accumulating strength can it have the power to continue to rise. Of course, the Spring Festival holiday is long and the market is subject to many variables, which may go up or down.
The market development before the holiday is basically like this. The market is more concerned about the trend of the market after the holiday. After all, the suspension time is still relatively long during the Spring Festival, and foreign transactions continue. Once there are major changes in the external market, the domestic market will inevitably open after the holiday. Cause vibration. Therefore, customers in the cotton spinning industry pay close attention to the post-holiday market situation. The current spot market has strong support. As long as downstream demand can be stabilized, cotton prices will continue to run at a high level.
Global cotton production has increased significantly, but consumption has also increased significantly. Supply and demand are still in a tight balance. Cotton production is relatively fragile. Once supply problems occur, prices will be affected. China’s cotton is already in a stage where production exceeds demand, and a certain amount needs to be imported from abroad every year to meet domestic demand. According to data from the National Cotton Market Monitoring System, my country’s cotton production in 2021/22 was 5.8 million tons, while consumption was 8.4 million tons, with a gap of about 2.6 million tons. Due to the effective replenishment of quotas, cotton reserves, and imported cotton, the overall operation of my country’s cotton is stable, and the fluctuation range is smaller than that of foreign cotton.
In the short term, Xinjiang cotton and foreign cotton prices are strong. As the industry begins to restock, demand gradually recovers, and cotton prices are strongly supported. Of course, according to the new cotton price, there is no profit for downstream enterprises, which limits the increase of cotton. If the increase in yarn price is smoothly transmitted to the downstream, cotton price will have room to continue to rise. Otherwise, it will remain high and fluctuate.
The post-holiday market is affected by various factors such as crude oil, foreign cotton, foreign yarn, orders, etc., and may rise or fall. The author believes that the probability of rising or range-bound fluctuations is greater, and there is no basis and conditions for a sharp decline.
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