Cotton Price Rises Steadily, Yarn Price Continues To Shrink

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According to the statistics of the business agency, as of August 25, the average price of domestic lint spot market was 12636 yuan / ton, which was 296 yuan / ton higher than the price at the beginning of August, or 2.40%, and 6.86% lower than that of last year. Us hurricane stimulated market bullish, domestic lint spot rose steadily, ice cotton in March exceeded 66 cents.

Both sides agreed to create conditions and atmosphere to continue to promote the implementation of the first phase of Sino US economic and trade agreements. Last week's US cotton export weekly report showed that in 2020 / 2021, the main buyers of us upland cotton were 12900 tons (8.7-8.13) from China. The US cotton export was guaranteed, and the price of cotton in ice period rose sharply. However, it was a double-edged sword for the domestic cotton market, and the market choice was diverse. Traders should deal with the impact of imported cotton price advantage.

As of August 25, ice cotton for March was 66.42 cents / pound, up 1.88 cents / pound, or 319 yuan / ton, compared with August 3. As of August 25, the settlement price of domestic zhengmian 2009 contract was 12355 yuan / ton, up 295 yuan / ton compared with August 3.

Weather is an eternal topic for agricultural products, and market funds will not easily miss this opportunity to take advantage of the hurricane. Supported by the good US cotton export data, the cotton in ice period broke through 66 cents, domestic demand improved, and the reserved cotton was favored by the market, and the average transaction price was greatly increased. However, this year's consumption side has been significantly reduced, the external sales situation is not optimistic, the contradiction between supply and demand is difficult to solve in the short term, the forward cotton price is bullish, and the spot market is rising slowly.

Price changes of cotton yarn at home and abroad from August 17 to 21, 2020

(data source: national cotton market monitoring system, China Cotton network)

The spot price of international cotton yarn is basically stable, and the domestic yarn price continues to decline in a weak way. In July, China imported 170000 tons of cotton, an increase of 20000 tons on a month on month basis, a year-on-year increase of 15%. The import yarn increased greatly, and domestic mills were under pressure. In order to narrow the price difference between inside and outside yarn, domestic yarn price continues to be weak adjustment. On the other hand, due to the steady increase of cotton price, the price difference between yarn and cotton continues to pull in, and cotton yarn profit is further compressed. Production and sales recovery, cotton mill confidence slightly enhanced, but the competitiveness of external yarn can not be ignored, yarn prices are expected to stop falling and seek stability.

Business agency analysts believe that the U.S. hurricane hype effect to promote cotton prices, but the demand market did not improve greatly, the rise of the cotton market road will not be smooth. Enter the traditional textile season, although not as in previous years, weaving enterprises operating rate is still improved. On the other hand, with the increase of domestic imported yarn, the competition pressure of yarn mills is gradually increasing, and the purchase of raw materials is more cautious. The reserve cotton with high cost performance ratio is more sought after by textile enterprises. Recently, the transaction price of reserved cotton is high, with goods of 500-600 yuan / ton. With the consumption of raw materials, spot sales pressure may be eased, cotton prices are expected to continue to rise in the near future.