Cotton Market Mentality Has Changed Significantly Compared With Last Year.

The development and Reform Commission and the Ministry of Finance jointly announced that in 2017, the sale of cotton reserves will start in March 6th, and the deadline is tentatively scheduled for the end of August. The number of daily sales will be temporarily suspended by 30 thousand tons.

If there is a noticeable rapid increase in prices at home and abroad over a period of time, the turnover rate of the auction sale of reserve cotton will exceed three days or more than 70% days a week.

From the analysis of cotton supply and demand, it is predicted that domestic cotton supply will exceed the demand before the end of February, if the cotton reserves are planned out or the cotton price will be pressed.

From the purchasing intention of downstream enterprises,

In the early stage of the auction, auction prices or higher prices were mainly due to the textile companies waiting for more cotton reserves.

If the textile enterprises do not continue to replenishment during this period, the cotton price will increase at the early stage of the launch, but the latter will still face greater downward pressure.

Statistics show that in September 2016 -2017, 4 million 677 thousand tons of lint were processed in Xinjiang and the mainland in January, of which 2 million 879 thousand tons were sold and 1 million 798 thousand tons were not sold.

In the same period, cotton business inventories were 2 million 678 thousand tons, and between cotton and cotton commercial stocks were not sold, the difference between them was 880 thousand tons.

Under normal circumstances, if all the sold cotton is purchased by textile enterprises, and they all enter the warehouse of spinning enterprises, the two data should be very different, but the difference between the 880 thousand tons is obviously more.

We believe that the reason for the difference is that textile enterprises have not purchased part of the purchase, and the two is the purchasing part of intermediaries.

In contrast, in September 2015 -2016, 4 million 622 thousand tons of lint were processed in January, of which 2 million 393 thousand tons were sold and 2 million 229 thousand tons were not sold, compared with 2 million 340 thousand tons of cotton commercial stocks in the same period.

Unsold cotton and

The difference between commercial inventories is 111 thousand tons, which is significantly lower than the 880 thousand tons this year.

We believe that this data verifies the de stocking process of cotton intermediate links in the same period last year.

Before domestic cotton is put into operation, domestic cotton supply exceeds demand.

By the end of January 2017, 1 million 798 thousand tons of cotton and 880 thousand tons of intermediate links had not been sold in China.

Taking into account the extremely low stock of Xinjiang's reserve cotton, it is estimated that

Reserve 8 tons of cotton for 600 thousand months (until the end of September 2017).

It is estimated that China will import 80 thousand tons of cotton in February and 650 thousand tons of textile enterprises in the mainland.

As of the end of February 2017, domestic cotton supply and demand profit and loss =179.8+88-60+8-65=150.8 (10000 tons).

Data show that in 2016, 3 and April cotton stocks of spinning enterprises remained at around 330 thousand tons, while the cotton stocks of textile enterprises were about 650 thousand tons at the end of January 2017.

Cotton inventories of textile enterprises have improved significantly this year. If the cotton stocks of textile enterprises have not been significantly reduced before the end of February, the power to beat them will be weaker than that of last year.

At the end of January 2017, 2 million 388 thousand tons of lint and 1 million 512 thousand and 500 tons of Sinop were sold in Xinjiang, and 875 thousand and 500 tons of lint were sold, but they did not come out of the border.

By the end of March 2016, 2 million 96 thousand tons of lint and 2 million 393 thousand tons of Sinop were sold in Xinjiang, and 297 thousand tons of lint had not yet been sold.

On the basis of comprehensive analysis, we believe that domestic cotton supply exceeds demand before cotton reserves are put into operation, and cotton prices lack a sustained upward basis.

And intermediate links and spinning enterprises inventory is obviously higher than last year, continuous filming of reserve cotton situation is difficult to reproduce.

However, if the textile enterprises wait for the reserve of cotton, the cotton stock will be reduced to a relatively low level in the early period of the reserve cotton delivery, which will likely lead to a rapid increase in cotton price in the initial period of the reserve cotton.

For more information, please pay attention to the world clothing shoes and hats net report.