Affected by the recent dual-control policy, Jiangsu and Zhejiang have implemented power restrictions, and many companies have reduced production. Although the time is limited, it has had some impact on cotton demand. At the same time, cotton prices have continued to fall back, with obvious signs of weak growth.
According to market analysis, as Xinjiang cotton is approaching the market in large quantities, the mid- and long-term cotton price trend should be based on the National Day holiday. There is greater pressure on cotton prices to rise before the holiday, even if There are obvious signs of rush to harvest seed cotton, but the futures market has already reacted in advance. When seed cotton has not yet been launched in large quantities, the effect of continued speculation will be limited. Hot money in the market is now concentrated on black products, and there is no large amount of funds involved, so the number of cotton positions is limited. According to sector rotation, funds will be able to turn around and intervene in cotton after the black series speculation has temporarily come to an end.
Currently, downstream orders are lower than expected. In addition, the power restriction measures adopted by Jiangsu and Zhejiang provinces have indeed affected consumption. In the short term, it is a negative performance and there is great upward pressure. Of course, there is also the possibility of a deep decline. Not big, after all, the spot price is very strong. Waiting for Xinjiang cotton costs to settle after the holiday, new operating logic will inevitably emerge in the cotton market.
As for the impact of the power restriction policy, some analysts believe that it is negative in the short term, but it may be beneficial to industry development in the long term. At present, the inventory of cotton yarn is limited, but the inventory of gray cloth and downstream products is large. If the power restriction policy can continue and the inventory of cloth and other products continues to be consumed, once consumption resumes, it will inevitably cause a tight supply of products and stimulate upstream companies to step up production.
According to Zhejiang cotton traders, the current cotton price is around 17,100 yuan/ton, and there is limited room for short selling. New factors are needed to promote long selling, and the price is temporarily range-bound. Due to tight shipping, foreign customers have released Christmas orders for this year ahead of schedule, resulting in a sluggish peak season and relatively weak demand. </p
