Although the prices of cotton and cotton yarn have risen again and again in recent days, most textile companies have reported poor shipments, and the market mentality is cautiously rising. As of August 19, 2021, CY C32S pure cotton yarn closed at 27,300 yuan/ton, an increase of 480 yuan/ton from the same period last week. The CC 3128B cotton index closed at 18,541 yuan/ton, a sharp increase of 700 yuan/ton from the same period last week.
In terms of raw material cotton, Zheng Mian sold out all the bad news at the end of June 2021 , after a wave of corrections at the end of July, it rose again and broke through the previous high. The 01 contract rose to a maximum of around 18,500 yuan/ton, which has increased by nearly 1,000 yuan/ton from the low in early August. The most fundamental reason is market expectations. Judging from the data over the years, news of new cotton production reductions appears every year, but it is not absolute whether the production will actually be reduced in the end. However, for now, it seems that it is imperative to reduce new cotton production and rush to harvest. Such expectations will gradually increase cotton prices, and the market basically recognizes this view, with high consistency. However, the cost of planting new cotton is rising, and the phenomenon that ginning capacity is far greater than output still exists. It is very possible that ginners will rush to harvest and push up cotton prices. At the same time, the downstream performance was not bad during the period from March to August. The off-season was not weak, and the cotton yarn industry inventory has never accumulated. The downstream expectations for the gradual tightening of global cotton supply were also reflected by increasing stockpiles and preparing stocks in advance. In summary, the above This is always the reason why cotton prices can rise steadily.
Compared with the “flying together” price of floral yarn last week, the rise in the price of pure cotton yarn has obviously encountered resistance. Although textile companies have raised prices, the actual transactions are very limited, and downstream acceptance is low and transactions are poor. This kind of situation occurs The reason for this situation is that the upstream and downstream expectations are inconsistent, there is a large gap in the fundamentals of cotton and cotton cloth, and pure cotton yarn is more embarrassing as an intermediate link. Because basically everyone has seen the expectation of rising sales of new cotton, and it is also during the Golden Nine and Silver Ten when demand is supported, so companies with funds basically have a certain amount of raw material inventory, and they are afraid that they will not have cheap raw materials after the order is placed. As can be seen from the picture above, the inventory of pure cotton yarn spinning companies has remained at a low level, while the cotton yarn inventory in weaving mills has remained at a high level in the past two years. More inventory has been transferred to traders, and traders’ inventories can It is said to be at an absolutely high level in recent years. But when all parties have made sufficient preparations, when the time does come, they seem to be lacking in energy, not to mention that the time has not yet come.
The epidemic situation at home and abroad has rebounded again recently, which has led to a decline in the expectations for the Gold, Nine and Silver Ten that had been optimistic in the early stage. Due to the lack of orders from weaving mills, the on-machine production of conventional varieties in weaving mills has increased, and the inventory has gradually increased. However, compared with last year, the current inventory level of weaving mills is at a low level, but it has been at a high level since October last year. This is in line with the cotton yarn supply of textile enterprises. Inventory forms a strong contrast. The reason is that from May to June, downstream gray fabrics expected that the price of raw materials in the peak season of September would drive the price of gray fabrics to continue to rise. Therefore, they placed orders in advance to stock up, resulting in the phenomenon of “not slow in the off-season” this year; in other words, due to overdraft of orders in advance , leading to insufficient recovery in recent orders, and may also lead to similar market conditions in September to March this year, resulting in insufficient quality during the peak season. Although the inventory of weaving mills is not large, due to the bearish market outlook, the start-up remains stable. However, as orders are difficult to improve and raw material prices are firm, some weaving mills may reduce production and load.
To sum up, in the short term, under the news of new cotton production reduction, the probability of upstream cotton rising is high, and the pure raw materials will push the price up. The price of cotton yarn will also rise, but it still depends on the actual demand in the downstream. Most of the current market views are that it will rise first and then fall. If the price rises too much, there will always be a correction. When the market finds that demand is lower than expected, some traders and textile companies with large inventories may rush away, causing prices to be difficult to rise or even fall. </p
