According to feedback from cotton trading companies in Zhangjiagang, Qingdao and other places, the quantity of US cotton, Brazilian cotton, Indian cotton, etc. that arrived in Hong Kong and entered the bonded warehouse in late April is still relatively large, especially US cotton; while cotton within the 1% tariff Import quotas are very tight; coupled with the continuous upward breakthrough of Zheng cotton, the price difference between domestic and foreign cotton has narrowed. Therefore, not only the bonded cotton inventory in China’s main ports has increased, but the non-bonded cotton inventory has also continued to rebound. The pressure on port storage capacity has further increased, and some locations are good. , bonded inventory with relatively reasonable warehousing charges is close to “liquidation”.
A cotton importer in Huangdao said that there are not many sources of bonded Indian cotton and Brazilian cotton quoted in RMB (purchasers are required to bring their own 1% tariff quota for customs clearance); and U.S. cotton spot goods are mostly customs-cleared cotton, and traders offer basis quotes and fixed prices. For example, the RMB quotation of India’s CCIM1-5/32 (strong 29GPT) bonded cotton is mostly 14,250-14,300 yuan/ton, while the quotation of customs clearance CCIM1-5/32 reaches 15,900-16,000 yuan/ton, and the quotation of non-CCIM1-5/32 customs clearance cotton 15,500-15,700 yuan/ton.
Judging from the survey, due to the current “high pressure” on cotton port inventory, coupled with the issuance of an additional 700,000 tons of sliding tax cotton import quotas, it is not only a “textile special”, but also 100 % non-state-operated trade, resulting in relatively confusing quotations for bonded and customs-cleared foreign cotton at ports. The price difference between lint cotton with the same quality indicators and the same origin can even reach 300-400 yuan/ton. For example, the net weight quotation of Qingdao Port’s 2020 Brazilian customs clearance cotton M1-1/8 (strong 28GPT) ranges from 16,300-16,800 yuan/ton; the net weight quotation of US cotton 31-336/37 also ranges from 16,800-17,200 yuan/ton; small and medium-sized cotton spinning enterprises, Most of the purchases by middlemen are done by “shopping around” and repeatedly negotiating prices.
An international cotton merchant has judged that as of the end of April, the total bonded + non-bonded cotton inventory in China’s main ports may have reached about 550,000 tons, in 2019/20 and 2020/21. U.S. cotton and Brazilian cotton account for more than 60%; Indian cotton arriving and warehousing in Hong Kong has also increased significantly since March, of which cotton stocks in Qingdao and Jiaozhou Bay are about 330,000-350,000 tons; Zhangjiagang, Jiangyin, Nantong and Nanjing The total cotton inventory in other regions is about 120,000-130,000 tons (of which Zhangjiagang inventory is about 87,100 tons); the cotton inventory in other ports such as Shanghai, Guangzhou, Ningbo, Tianjin and other ports is 80,000-90,000 tons. Because the quantity of foreign cotton in the April-June shipping period is still relatively large, the short-term port storage pressure is “easy to rise but difficult to fall.”
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