One Word: Cotton Prices Are Not Rising Substantially. Basic Investors Should Pay Close Attention To The Spot Trend.

There are not many hot spots in the cotton market recently. market Basically around the end of the year, the gap between production and demand and the inventory at the beginning of next year. consumption It is more difficult to compare with the question of whether or not we can get to the bottom after years of decline. According to the author's analysis, there is a lack of profit factors in the late market. Spinning enterprises After the completion of the replenishment, spot cotton prices may be retaliated, and investors are advised to wait patiently for market opportunities.

　 First, the textile industry has greatly increased its industrial inventory, and cotton is favored.

At the beginning of this month, the inventory of cotton industry in China increased significantly. According to the sampling survey of the national cotton market monitoring system, as of January 6th, the average daily use of cotton samples was about 39.3 days (including the quantity of cotton imported to Hong Kong). The annulus ratio increased by 10.7%, an increase of 13.7% over the same period last year, an increase of 5.1% over the last three years. In the domestic market, lint sales are not ideal in all parts of the country. The replenishment of domestic textile enterprises is proceeding smoothly, mainly through the way of purchasing cotton. In December 2010, China's cotton imports reached 461700 tons, an increase of more than 1 times compared with the same period last year, almost 3 times that of November. Based on the projected shipment schedule of cotton in the US and India, the trend of massive imports is expected to continue in January. In addition, India's cotton production is expected to be raised to 34 million packs, larger than the US Department of agriculture's forecast of 32 million 500 thousand packages, and India may raise the export ceiling. The quota issued at the beginning of the year has also increased the enthusiasm of the enterprises to stock up. It is likely to duplicate the scenario of about 4 million tons of imports in 2005 this year. The speculation on supply side pressure has come to an end.

　　 Two, downstream cargo pickup, domestic spot stalemate

Compared with the active sales of cotton, domestic cotton lint is facing a high cost problem. According to the relevant data of the national cotton market monitoring system, by December 24th last year, the average purchase price of seed cotton purchased by scale was 5.83 yuan / kg, up 73% over the same period last year, and the average acquisition cost of cotton seed was 24784 yuan / ton (excluding processing cost), up 84.8% over the same period last year. In the lower reaches, if we use the current cotton price to calculate the profit of the mill, it is also at a low level for a year. Cotton traders are reluctant to sell for cost reasons, and the downstream market is in a stalemate due to shrinking profits and pick-up. I expect that the current spot is expected to continue, but the final benefit is likely to be a high cost of cotton business, because the market is lack of more confidence, supply and demand gap is not a year ago, there is no advantage in stockpiling.

　 Three, the growth rate of textile production is decreasing and demand side is restrained.

The growth rate of textile production has declined, and the demand for cotton has been restrained. According to the National Bureau of statistics, the increase in textile industry in the same period last year slowed down 2.3 percentage points over the same period last year, 1.6 percentage points slower than in October last November. In November, cotton yarn output increased by 6.2% over the same period last year. The growth rate dropped by 5.6 and 1 percentage points respectively over September and October. The chemical fiber and cotton blended yarns increased rapidly in the same period, and the increase in November was more than 22% in the same month. Last month, the textile industry in PMI continued to be below 50%, and the new order index declined significantly. Data show that high cotton prices have a great effect on the growth of downstream demand, and the substitution effect of chemical fiber, viscose and other products is obvious. The actual demand for cotton may be lower than the market's earlier expectations.

　 Four, the recent trend is difficult to market, pay attention to the development of textile enterprises after the festival

With the arrival of the off-season orders, more and more closes and shutdowns have occurred in the recent cotton mills. In addition, the stock market is coming to an end. It is still more difficult to move the goods on the spot when the cost is rising. At this time, the mentality of the spinning enterprises is more critical. If there is a better expectation for the downstream market, and the cash flow is more sufficient, the enterprises may have the action of replenishing raw materials in advance. However, most textile enterprises, because of the high price of all the links in the whole production chain this year, are not likely to make large scale replenishment because of the risk consideration.

On the whole, the stalemate of domestic cotton will continue, and there will be no chance of trend before the year. I believe that after the holiday is a good time to intervene. The target is near the 25000 cost line. Investors should pay close attention to the spot trend.