According to the China Cotton Industry Association, there is currently not much cotton left in reserve for early auctions by textile companies. Some textile companies have a need to replenish their stocks, but they are unable to absorb the sharp increase in cotton prices. The “Double 29” Xinjiang cotton delivery price is about 16,000 yuan/ton. Taking into account the 500 yuan/ton transportation subsidy, the factory cost reaches 16,500 yuan/ton (an increase of about 2,000 yuan/ton compared with the use of reserve cotton). The current prices of carded 32S and combed 40S are around 22,800 yuan/ton and 26,000 yuan/ton respectively, which is only about 100 yuan/ton higher than the beginning of November, far less than the rising rate of cotton prices.
Textile enterprises report that sales of pure cotton yarn have been weak recently, and combed high-count yarns are rarely interested. Enterprise orders are not in good shape, especially polyester-cotton yarn sales have dropped significantly, and large orders are rare. Analyzing the reasons for the rise in cotton prices is not unrelated to the recent amplification of Xinjiang cotton transportation pressure. Industry insiders analyzed that strict inspections of overloading will have a greater impact on cotton warehouse receipts and spot goods. The future Xinjiang cotton transportation situation depends on transportation policies. If The continued tightness of transportation capacity will affect the cotton supply of mainland textile companies, thereby affecting prices.
Domestic cotton prices have skyrocketed, but international cotton prices, represented by U.S. cotton, have not risen. At present, the price difference between domestic and foreign cotton has once again widened to about 2,000 yuan/ton. Xinjiang cotton transportation out of Xinjiang is not efficient, and coupled with restrictions on imported cotton quotas, The production capacity of domestic cotton yarns with counts of C32S and below continues to decline, and the proportion of small and medium-sized enterprises reducing production is still increasing. Low-count yarns from India, Pakistan, Vietnam, etc. will once again enter the Chinese market in large quantities, which is not conducive to the development of textile enterprises.
Speaking of the recent Zheng cotton futures market, it is jaw-dropping. On November 11, the main contract CF1701 broke through 16,000 yuan/ton and was sealed at the daily limit of 16,270 yuan/ton. In the night trading, it once again broke through the 17,000 yuan/ton daily limit. Just when the bulls were cheering, the daily limit was quickly opened and dropped directly to 14,775 yuan/ton. , the single-day fluctuation range reached more than 10%, making it difficult for both long and short parties to escape.
Zheng cotton has been in a price rebound in the past two days. Driven by the Zheng cotton market, cotton companies have begun to stir up commotion in their lint quotations. The delivery price of “Double 29” and “Double 30” lint cotton at the southern Xinjiang platform has risen to 16,000-16,200 yuan/ tons, the number of textile companies and traders asking for prices and viewing goods has increased, but the actual transactions are still insufficient.
Coupled with the push by textile companies to replenish their stocks, it is possible for Zheng Cotton to squeeze out its positions. In addition, the RMB exchange rate continues to fall, other commodities have experienced large-scale increases, and factors such as huge amounts of money flowing out of the property market and stock market into the futures market have also had a greater impact on cotton. However, although the financial attributes of cotton may cause commodity prices to deviate significantly from the intrinsic value, such deviations are generally short-term. In the long term, supply and demand are still the main factors that determine prices.
