According to feedback from cotton trading companies in Zhangjiagang, Qingdao, Guangzhou and other places, since mid-December, China’s main ports have not only cleared customs of US cotton, Brazilian cotton, Indian cotton, Australian cotton and other spot stocks compared with November, but also have relatively positive quotations. Traders are reluctant to sell and the selling sentiment has cooled down. The quantity of US cotton and Brazilian cotton resources in the December/January/February/March shipping schedule is also very concentrated, showing a continuous growth trend.
Industry insiders analyze that on the one hand, the additional 700,000 tons of cotton import quotas with sliding quasi-tariffs issued in 2021 are valid until December 31; in addition, the 1% tariff quota in 2022 is expected to be issued around mid-January, so starting from mid-November Since then, some cotton textile companies and traders have begun to focus on “sweeping goods” for bonded ports or spot medium and high-quality foreign cotton; on the other hand, due to the continued inversion of domestic and foreign quotations in November and December (the quotations of Brazilian cotton and US cotton traders with the same quality index are higher than Mainland Xinjiang cotton), the shipment and warehouse transfer of Xinjiang cotton to the mainland consumption areas in 2021/22 are constantly accelerating, and as the textile and clothing order-taking/production capacity of Southeast Asian countries returns to epidemic levels, orders from Europe and the United States and other countries are quickly returning, etc. This has led to weak demand for imported cotton. In addition, some traders took advantage of the decline of ICE and Zheng cotton to increase the sales basis, which also caused the weakening of the competitiveness of foreign cotton.
Judging from the quotations, from December 20th to 21st, the net weight quotations of Qingdao Port customs clearance Brazilian cotton M 1-1/8 (strong 28/29GPT) and US cotton 31-3/31-4 36 were 22,800-23,100 yuan/ton respectively. (fixed price), 23,300-23,600 yuan/ton (basis quotation), the same grade and quality of Brazilian cotton and US cotton are no longer upside down, and the competitiveness of customs clearance and bonded Brazilian cotton continues to recover compared with US cotton, Indian, Australian cotton, etc.; and The net weight quotation of Indian cotton M 1-5/32 for customs clearance in 2020/21 is 20,800-21,200 yuan/ton (including CCI rotation resources, the quotation of Indian cotton in 2019/20 is about 20,000 yuan/ton), and the price difference with Brazilian cotton is enlarged to nearly 2,000 yuan/ton. yuan/ton, and the price difference with US cotton is 2,000-2,500 yuan/ton. However, judging from the inquiries and shipments reported by traders, downstream cotton spinning mills are not very convinced of the low-priced Indian cotton.
As of now, customs clearance + bonded Indian cotton stocks in China’s main ports are still in a high and difficult state. Taking into account the January/February/March shipping schedule, the shipment volume of US cotton, Indian cotton, Brazilian cotton and West African cotton in 2021/22 has shown a relatively obvious upward trend. In addition, cotton textile factories in coastal areas may have an early holiday this year and the epidemic situation Due to the divergent impact, some traders with slightly larger inventories and tight cash flow plan to speed up sales and collect payment quickly before the Spring Festival.
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