After the Spring Festival, long-staple cotton will be “spring-like”

Long-staple cotton is a little quiet these days. On January 29, an insider in Jinan, Shandong Province said that since late January, the price of long-staple cotton has been stable and transactions have been “step-by-step.” First, the ex-warehouse price of grade 137A long-staple cotton in the local warehouse is 27,500-27,600 yuan/ton (gross weight, without ticket), grade 237 is 26,700-26,800 yuan/ton, and grade 336 is 25,600-25,700 yuan/ton, basically the same as last Thursday. flat. Second, judging from their company’s outbound pace, there have been 2 transactions in the past 10 days, selling a total of 170 tons of long-staple cotton. The shipment speed is faster than the same period last year, but lower than expected this year, neither too fast nor too slow. “Downstream cotton companies do not stock large quantities of goods at all. They treat our cotton merchants’ warehouses as theirs.” An insider in the industry said that their company currently has more than 3,100 tons of long-staple cotton in stock and still insists on selling at the same price. People in the industry believe that now that Laba is over, textile companies all over the country are working overtime to complete orders for the year before. The Spring Festival holiday will be on the 23rd and 4th of the twelfth lunar month, and it is expected that there will be no major fluctuations in year-end procurement.
These days, I have been interacting with cotton merchants in surrounding Shandong, Hebei, Tianjin and other places. Now we are mainly doing three things: first, selling at the same price, but supporting the price; second, actively contacting Xinjiang cotton companies and ordering some high-quality cotton. It is planned to ship to the mainland after the Spring Festival; third, withdraw funds. Some time ago, some textile companies purchased long-staple cotton on credit, and cotton merchants rushed to demand repayment after the Spring Festival. Different from the “calm” situation in the mainland, Xinjiang’s long-staple cotton has been experiencing “undercurrents” recently.
On January 29, a cotton company owner in Avati, Aksu, said that individual cotton companies have raised the price of long-staple cotton these days. Among them, the ex-factory price of 137A grade is 26,800-26,900 yuan/ton, and some particularly high-quality products reach 27,000 yuan/ton. It increased by 200 yuan/ton compared with last week. Grade 237 is 26,000 yuan/ton, grade 337 is 25,200-25,300 yuan/ton, and there is also an increase of 100-200 yuan/ton. Talking about the reasons for the increase, the boss said that first, most cotton companies are optimistic about the long-staple cotton market after the Spring Festival; second, cotton companies have clearly felt that there is not much high-quality cotton in Xinjiang, and the “wait for price” mentality is very obvious.
A friend in Xinjiang even said that they have been looking for long-staple cotton in Xinjiang these days, but they did not expect that there are many cotton merchants who have the same idea as them. “Our inquiry has aroused the alarm of cotton companies.” The friend said that many cotton companies have the attitude that procurement is OK, but conditions must be met. First of all, the settlement must be in cash; secondly, the transaction is done at a fixed price and no price adjustment is allowed; thirdly, after ordering, the shipment will be started immediately, and the cotton company will no longer bear the responsibility of warehousing. “These attitudes are obviously different from last week.” The friend said that Xinjiang cotton companies are obviously very confident.
This friend’s analysis: 1. Since this week, ICE cotton futures have continued to rise. On January 28, the most actively traded March contract rose by 0.66 cents/pound to close at 59.44 cents/pound, touching the highest level in the past week and a half. . 2. On January 28, Zheng Cotton’s main 1505 contract closed at 13,135 yuan/ton, up 115 yuan/ton; the forward 1509 contract closed at 13,570 yuan/ton, up 130 yuan/ton. Since late January, Zheng cotton has basically been trading above 13,000 yuan/ton, indicating that the market has basically recognized that the current cotton price has “bottomed out.” 3. According to some international cotton merchants, U.S. cotton sales have been progressing very fast this year. So far, about 90% of the contracts have been completed, but only about 30% have been shipped, indicating that China is waiting for the 894,000 tons quota to be cleared, and U.S. cotton has been seriously oversold. . Australian cotton production has been reduced by about 50% this year, leaving a supply gap. Therefore, it is expected that China’s Xinjiang cotton and high-quality long-staple cotton will be more popular this year. In fact, the reasons given by this friend are quite pertinent.
It has been emphasized that China’s cotton production has been significantly reduced this year, especially the scarcity of high-quality cotton. Coupled with China’s “control” quotas, US cotton has been oversold. This is a sign of a sharp rise in cotton. So why is it still so sluggish now? There are no more than two things: first, 11 million tons of national reserves; second, downstream demand is still sluggish. We know that the 11 million tons of state reserves are the biggest uncertainty. When and at what price it will be released will have a huge impact. In addition, the profits of Chinese textile companies have actually “turned from negative to positive” at present. Most yarn count profits exceed 1,000 yuan/ton, and some are more than 2,000 yuan/ton. In other words, this year, first, the pressure on the state reserve of 11 million tons was overestimated; second, the operations of textile enterprises were underestimated. In this way, hot money, cotton merchants, and traders will not dare to act rashly. Therefore, we still have reason to believe that after the Spring Festival in 2015, domestic long-staple cotton will be in full swing.