Hot Spot Concerns: The Three Major Factors That Affect The Current Cotton Price Rebound

Entering late March, domestic

Finally, we have seen a temporary stabilization and some high grade and high quality.

The first time it reported a rise of 100-200 yuan / ton, some cotton business enterprises and middlemen began to play the role of "reservoir".

However, due to

Compared with the expected delays, the decline of cotton yarn and fabric sales in the peak season and the reduction of cotton price difference between the inside and outside of the cotton belt led to a large slide in the import of cotton and yarn in India and Vietnam. In addition, the direction of the economic recovery process led by the developed countries such as the United States and the European Union has been very clear.

In the past month, ICE cotton and zhengmian main contracts have rebounded 5 cents / pound, 700 yuan / ton respectively, but cotton spot is rising with caution. The negative factors are still following the shadow, rebounding or even reversing are still facing great resistance.

What are the factors that affect cotton price rebound?

1, reserve cotton will be normalized.

There are three effects on the storage of cotton. One is cotton quality and spinnability, which is close to cotton, Brazil cotton, West African cotton, India cotton and so on. The import volume of China's cotton mill to low and medium quality cotton will continue to shrink, and its supporting role for ICE cotton will be weakened. The second is the rapid reduction and even integration of cotton prices at home and abroad. A large number of 40S and below cotton yarns in India, Vietnam, Pakistan, Indonesia and other places will be blocked by Chinese textile enterprises, which will inevitably lead to a decline in cotton demand in Southeast Asian and Central Asian countries and thus suppress the international market; third, the linkage between reserve cotton production and external cotton prices, both domestic and foreign cotton prices may trigger a chain reaction.

2, the Fed's interest rate rises and the rebound of commodities is rough.

The US non farm data released in April 1st showed that the United States added 215 thousand people in March to non farm employment, slightly better than the expected 205 thousand, while the hours paid by the market increased slightly, and the US economic data continued to improve.

In addition, the Federal Reserve released the minutes of March meeting at two o'clock on April 7th. The content shows that almost all Federal Reserve officials believe that the risk of the US economic downturn is increasing. From the perspective of the Federal Reserve, the strength of core inflation can provide strong support for the inflation target of 2%.

Inflation is generally facing downside risks, as inflation expectations are falling and the US dollar is strong. Because of the larger divergence in the Fed's interest rate hikes, the short term direction of commodities is unclear.

3, how long can the cotton consumption season last? From the feedback of cotton textile enterprises in Henan, Hebei, Jiangsu and Shandong, the situation of cotton yarn and grey cloth has been improved since the domestic cotton prices fell sharply after the Spring Festival. In addition, the credit department has increased the support to the real economy to a certain extent. The spinning and weaving profits have not only been turned negative, but also the progress of production and marketing of OE21S and C21-C40S has been accelerating, and the confidence of the cotton enterprises and traders to enter the market with the purchase and use of the products has been increasing continuously. The confidence of the 3 companies is increasing.

However, according to the survey, the orders of the general Loom factory only received around mid May, and the profits of the weaving factories, garment factories and foreign trade companies had been engulfed by the rising of dye charges and printing and dyeing fees. Shaoxing, Xiaoshan and

After the Spring Festival, the cost of dyeing and finishing plants rose by 0.50-0.80 yuan / M. Most of them had no profits or even lost money, except for high-density and high-density grey cloth orders. Some trading companies believed that the cotton and cotton spinning situation would be warmer or short-lived.