It has been the fifth day that the State Reserve has entered the round. Zheng cotton has fallen significantly. The hype of supply pressure has once again been brought to the stage. The auction price of cotton in the previous round has increased significantly. The standard grade has reached 16,600 yuan/ton. The price of the State Reserve is relatively optimistic. , the possibility of delayed rotation storage time in the later period is getting longer.
Recently, the price of 3128 grade real estate cotton in the Yellow River Basin is 16,100 yuan/ton (gross weight, with ticket), and in some areas it is lower, as low as 15,800 yuan/ton. The price of third-grade small bale cotton is 15,400 yuan/ton (gross weight, with ticket), 4128 grade The price is 14,300-14,600 yuan/ton, and the price of small bale cotton 4128 has dropped by 50-100 yuan/ton. Most textile companies strongly believe in the quality of the state reserve and turn a blind eye to the spot goods. The short-term sales pressure is huge. Once the number of state reserves increases in the later period, real estate cotton prices may come under pressure.
The spot market in Xinjiang is relatively deserted. The price of 3128/2128 hand-picked cotton in Aksu, Bachu and other places is 15,600-15,800 yuan/ton (gross weight, self-pickup), and the “Double 28” price is 16,000-16,300 yuan/ton (weighed gross weight). ), an increase of 100-200 yuan/ton compared with the previous two days. According to the development of this trend, the time for the cotton reserves to be rolled out may be delayed, supply pressure will increase sharply, and textile companies will all focus on the state reserves, and the spot sales will be low or unsalable. Cotton merchants in Xinjiang feel that the transaction price is low and often use hedging. Once supply pressure tightens in the later period, cotton prices may fall back.
Despite a failed auction last year, the Chinese government began selling off state cotton reserves again on Monday, as Chinese textile mills have used up cotton stocks in the hope of buying cotton at lower prices.
The textile industry hopes the cotton environment will improve this year
The National Development and Reform Commission announced at the end of last year that by the end of August, the country would sell 30,000 tons of cotton per day.
Ye Jianchun, vice president of the China Cotton Textile Industry Association, said recently, “Many companies have almost used up their inventories because they expect cotton prices to fall during the upcoming national reserve cotton auction. They also believe that the quality of the cotton auctioned will be comparable. good”.
Last year, the auction was postponed from March to May, and the quality of the first batch of cotton auctioned was very poor, which led to tight market supply, triggering panic buying by textile mills and stimulating a sharp price increase of nearly 70%.
However, industry insiders believe the situation will be different this year.
The purchasing manager of a textile company in Shandong Province said she now only has one month’s cotton inventory, far less than the usual two to three months.
“Last year’s auction was rushed, but this year the government’s advance preparations were much better,” she said.
Traders also said they were confident the government would be able to meet the daily auction targets it set this time and that prices would fall, at least in the short term.
Wei Gangmin, chairman of Henan Tongzhou Cotton Industry Co., Ltd., said, “If the government fulfills its commitment in terms of quantity and quality of cotton auctioned, it will benefit the market a lot.”
“But if it cannot be fulfilled, it will lead to price fluctuations. If prices rise, it will curb demand and block the goal of reducing inventory.”
The international market is also paying close attention to China’s selling of cotton reserves because it holds more than half of the world’s cotton reserves. Increased domestic supply will further affect cotton imports.
Generally speaking, the price of state reserves is uneven, but the general direction is higher. Once high-quality cotton is released in the later period, it will be subject to crazy bidding. Most domestic cotton companies are reluctant to sell or hedging. Foreign countries have already said that China is a major cotton importing country. In the short term, Perhaps it is not strong enough and may still be at an advantage in the long run.
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