In late November, most seed cotton harvesting and sales in northern Xinjiang have ended, and the proportion of cotton processing companies that have stopped harvesting has exceeded 70%. The sales of hand-picked cotton and machine-picked cotton in southern Xinjiang have also entered an advanced stage. The daily purchase volume of ginners has dropped significantly, and the focus of the entire market has shifted to lint sales, warehouse transfers, hedging and delivery.
At present, in addition to some cotton traders purchasing “Double 29” lint cotton at a fixed price, the sales of Xinjiang cotton in 2021/22 of “Double 28” and below and “Double 30” and above are relatively slow, with a significant year-on-year decline, plus 9- Xinjiang cotton shipments continued to be weak in November, so the industry is worried that Xinjiang’s regulatory warehouses will be “overcrowded with cotton” from January to March.
Judging from recent surveys of some cotton spinning enterprises in Anhui, Henan, Jiangsu, Shandong and other places, the raw material replenishment plan at the end of November will be postponed again by 10-15 days. The reasons include the following: First, the relevant departments will The launch of the second batch of 600,000 tons of central reserve cotton in 2021 has met the consumer demand of cotton-using enterprises for high spinnability cotton; second, domestic cotton yarn quotations have continued to fall since November, with a cumulative downward adjustment of nearly 1,000 yuan/ton. The prices of cotton, polyester staple fiber and other raw materials purchased since October have been at a high level, and spinning profits have dropped significantly. Some cotton spinning mills have even experienced an inversion of production and sales. Third, in the past month or so, the phenomenon of gauze accumulation in cotton spinning mills has become more and more prominent. A large amount of working capital is occupied, and some textile companies in Henan, Shandong and other places have started price reduction and inventory removal operations. A cotton textile factory in Dezhou, Shandong Province said that the current gauze price is not only weak, but also lacks the support of medium and long-term orders for more than one month. Coupled with the constraints of external factors such as power cuts and environmental protection, the price of high cotton in 2021/22 still needs to be sufficient. It takes time to digest, and the short-term stock replenishment strategy of small and medium-sized yarn mills to buy as they go will not change.
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