In early and mid-September, as domestic and foreign futures prices fell, textile companies also paid more attention to medium and high-quality bonded cotton. Bonded cotton inventories in major ports in China decreased, and the pressure on port storage capacity gradually eased. Since late September, ICE futures have experienced a rare surge, and the direct import cost of foreign cotton has soared under the 1% tariff and sliding tax. At the same time, from October to November, the country continued to arrange for the release of reserve cotton in 2021, and the special sales of imported cotton textiles in the bonded area of China Cotton and China Textile Organization also increased the supply of foreign cotton. Therefore, the inquiry of bonded cotton at the port slowed down significantly, and the inventory showed a rebound. momentum. According to data compiled by the National Cotton Market Monitoring System, as of early October, the uncleared foreign cotton inventory at the port was around 320,000 tons.
1. Cotton prices at home and abroad rarely rose sharply, and the country took action to stabilize the market
Early September to early October After a brief correction, the domestic and foreign cotton markets experienced a rare rapid rise. Zheng cotton and ICE futures both rose by more than 20%, the highest level in the past ten years. This was mainly due to external speculation about China’s cotton import demand and China’s cotton import demand. The rush to harvest new cotton in Xinjiang has intensified, and domestic spot prices have increased by more than 2,000 yuan/ton compared with before the National Day. In order to stabilize the market, the state has successively introduced regulatory policies since the end of September to remind market participants to guard against business risks. As of October 12, the domestic and foreign spot markets have shown a stabilizing trend, with the settlement price of Zheng Cotton’s main contract falling back to around 21,000 yuan/ton, and the main ICE futures contract falling to 106 cents/pound.
2. The overall decline in bonded cotton stocks has recently cooled down in foreign cotton sales
According to market feedback, affected by the Affected by the recent surge in cotton prices at home and abroad, foreign cotton sales have cooled down significantly, and port inventories first fell and then rose. Overall, foreign cotton inventories at various ports have declined compared with the same period last month. According to market feedback, after the National Day, the special sales of imported cotton by China Cotton and China Textile were good. As foreign cotton prices fall, port inventories are expected to decrease again in mid-to-late October. According to data from the National Cotton Market Monitoring System, as of the first week of October, the foreign cotton inventory statistics at major ports are as follows:
Qingdao Port 219,200 tons, compared with 252,400 tons in the same period last month , including 78,000 tons of Brazilian cotton, 62,000 tons of Indian cotton, 39,000 tons of US cotton, 18,700 tons of Australian cotton, 7,600 tons of Central Asian cotton, 4,500 tons of West African cotton, Mexico, Sudan, Israel, Egypt, Greece, etc. About 9,400 tons.
Zhangjiagang 60,000 tons, 78,800 tons last month, mainly American cotton, Brazilian cotton, Indian cotton and African cotton
Nantong Port has 30,000 tons, compared with 40,000 tons last month, mainly American cotton, Brazilian cotton, Indian cotton and African cotton
No data from Wuhan Port is available
No data for Yueyang Port yet
3. Textile enterprises’ order status and purchasing intentions
According to market feedback, after the recent surge in cotton prices, the overall quotation price of yarn mills has increased by 1,500-2,000 yuan/ton. Now Spinning in this stage is not loss-making but the profit is not high. Although there are many orders, the prices are not high, which affects the spinning mills’ acceptance of orders. Overall, the operating conditions of yarn mills are acceptable. After digestion in the past few days, the yarn inventory has dropped significantly. In addition, the skyrocketing price of cotton is unsustainable and has basically no impact on downstream gray fabrics and clothing.
At present, reserve cotton continues to be released in large quantities, China Cotton and China Textile have released imported cotton resources, coupled with sufficient foreign cotton stocks at the port, the domestic spot market resources are very sufficient. This week, the daily sales volume of reserve cotton has increased to 25,000 tons, and the average daily transaction price is 18,200-18,400 yuan/ton. In comparison, reserve cotton has more advantages than other resources, so cotton enterprises still focus on reserve cotton. , the transaction volume of imported cotton is expected to increase as the price of foreign cotton falls. </p
