According to feedback from port traders in Qingdao, Zhangjiagang, Guangzhou and other ports, so far, the number of Australian cotton spot goods cleared by major ports in China for 2019 and 2020 is relatively small (some sellers only have 1-3 containers of goods for sale); and 6 / There are not many quotations and shelves of Australian cotton in 2020 for the July/August/September shipping date. Most traders and middlemen are cautious in inquiring, purchasing, and operating Australian cotton.
On June 17-18, Huangdao Port’s customs clearance SM 1-5/32 (strong 28GPT horse value G5) was quoted at 17,800-18,000 yuan/ton, which has remained stable for several consecutive weeks, and It has not adjusted with the oscillations of ICE and Zheng cotton. On the one hand, the quotation of Australian cotton is still significantly higher than that of US cotton and Brazilian cotton of the same quality and grade. Customers’ ability to accept and digest is relatively limited, and the audience scope is getting narrower; on the other hand, In the past two years, affected by many conditions such as weather, cotton seed, and harvest, the indicators of Australian cotton in different batches, different processing periods, and different processing enterprises have greatly varied. Cotton with quality 1-3/16 and above is not suitable for medium and long lengths. The substitutability of velvet and long-staple cotton has dropped significantly.
According to forecasts from Australian authorities, Australia’s cotton planting area in 2020/21 will be 300,000 hectares and cotton output will be 2.85 million bales, which is higher than the expectations of most market participants. However, the author judges that the following three factors have a greater impact on Australian cotton exports:
First, due to continuous rainfall in some cotton areas in Australia in April/May, although the total output of Australian cotton, The yield per unit area is not damaged, but the color grade, strength and other indicators of Australian cotton in 2020/21 are affected, and the lint leaf dust content is high, which is not conducive to high-count yarn blending and spinning rate;
Second, China-Australia relations are stiff, and there are no signs of recovery in the short term. Chinese cotton spinning companies and traders continue to treat Australian cotton in a cold manner in 2020. Some foreign businessmen and cotton traders are worried that China will impose additional tariffs on imported Australian cotton in 2020/21;
The third is the substitution of high-quality Brazilian cotton, American cotton, etc. for Australian cotton in the Chinese market The characteristics are very prominent. High basis difference, reduced quality consistency and sharp increase in sea freight are all “flaws” of Australian cotton exports. According to quotations from several large international cotton merchants, the basis difference for the June/July shipping schedule SM 1-5/32 has been stable at 11.5-12.5 cents/pound since mid-June; while the June/July shipping schedule for US cotton EMOT 21- The basis difference of 2/21-3 37 is only 7.5-9 cents/pound, which is 3-4 cents/pound lower than Australian cotton. </p
