International And Domestic Market Environment Analysis Of Cotton Trend

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Last week, domestic cotton futures prices first depressed and then rose, domestic cotton spot prices continued to fall; The international cotton price rises; Domestic and foreign cotton yarn prices continue to decline; Polyester staple fiber prices continue to weaken.

The atmosphere of the downstream textile market is still weak, and the cotton purchase intention of enterprises is weak, and the domestic cotton spot price continues to fall; With the news of the Fed's interest rate increase settled, the meeting of the Political Bureau of the Central Committee released positive signals on Thursday, and Zheng cotton prices rose in the later part of the week. From July 25 to 29, 2022, the average price of national cotton price B index, which represents the market price of standard grade lint in the mainland, is 15887 yuan / ton, which is 81 yuan / ton lower than that of the previous week, or 0.5%. The average settlement price of main cotton futures contracts in Zhengzhou Commodity Exchange was 14975 yuan / ton, up 233 yuan / ton or 1.6% over the previous week.

Last week, the US drought weather further affected cotton growth. Last Wednesday, the US Federal Reserve announced an interest rate increase of 75 basis points, and disclosed that "it may be appropriate to slow down the pace of interest rate increase at a certain point". The market was encouraged by the prospect that interest rate increase might be weakened. Commodity and US stock market prices continued to rise, and international cotton prices rose. From July 25 to 29, 2022, the average settlement price of Cotton Futures (ice) main contract of Intercontinental Exchange of America was 94.21 cents / pound, up 2.07 cents / pound or 2.2% compared with the previous week; The average price of international cotton index (m), which represents the average CIF price of China's main ports, was 118.83 US cents / pound, up 1.72 cents / pound or 1.5% over the previous week. The import cost of RMB 19472 yuan / ton (calculated by 1% tariff, including port miscellaneous and freight), rose 281 yuan / ton or 1.5% compared with the previous week. The international cotton price is 3585 yuan / ton higher than that of domestic cotton price, and the price difference is 362 / ton larger than that of the previous week.

Last week, the turnover rate of cotton storage was still strong, with a turnover rate of 0.36 million tons, and the turnover rate was still 1%. From July 25 to 29, 2022, the average transaction price of reserve cotton was 15859 yuan / ton, down 119 yuan / ton from the previous week.

Textile market continued the off-season atmosphere, enterprise orders are still scarce, cotton prices fell sharply, yarn prices increased, domestic cotton yarn prices continued to decline. Yarn market sales cold, prices continue to fall. The situation of receiving orders in domestic cotton market is grim, the operating rate of enterprises is generally not high, and the cotton price continues to fall. Polyester staple fiber prices continue to weaken with PTA raw material.

The decline in global economic growth has dragged down consumption, and the rebound in international cotton prices is likely to be limited. The international monetary fund again lowered its global economic growth forecast by 1.1 percentage points to 3.3%. US GDP shrank again in the second quarter, with a year-on-year drop of 0.9%. The market's expectation of the US Federal Reserve's radical interest rate hike has slightly cooled.

In terms of cotton market, the boll setting rate of American cotton has been greatly accelerated. As of July 24, 2022, the U.S. cotton boll setting rate in 2022 is 48%, an increase of 17 percentage points on a month on month basis, an increase of 13 percentage points on a year-on-year basis, and an increase of 10 percentage points compared with the average of the past five years. Recently, drought in Texas and rainstorm in India are in sharp contrast, which may cause damage to local cotton growth.

In the textile market, enterprises are facing many challenges. Vietnam textile and garment enterprises are generally faced with staff shortage and export restrictions. In the end market, according to the data of the US Department of Commerce, the US consumer spending grew at the slowest rate of 1% in two years in the second quarter, and the European and American markets are more cautious about the purchase of clothing and other end products. On the whole, the drag on consumption caused by the decline of global economic growth is increasing. With the coming of cotton supply in the new year, the rebound of international cotton price is likely to be limited.

Downstream dynamic sales did not appear, followed by new cotton supply, domestic cotton prices still tend to be cautious. The meeting of the Political Bureau held on July 28 pointed out that the current economic operation is facing some prominent contradictions and problems. It is necessary to maintain strategic determination and "strive to achieve the best results" in economic growth in the second half of the year. In terms of cotton market, Xinjiang cotton has entered the full boll period in 2022, and cotton farmers in many places reflect that picking may be ahead of schedule by about a week.

Xinjiang Climate Center predicts that there will be more high temperature and drought weather in August in Xinjiang, which is conducive to cotton boll and boll opening, and cotton yield is expected to continue to increase. According to the data of the national cotton monitoring system, as of July 28, 2022, the cotton sales progress in 2021 is 65.7%. According to the estimated domestic cotton output of 5.801 million tons, there are still 1.899 million tons of cotton unsold. With the new cotton market approaching, the supply of cotton market will further increase.

In the textile market, there is a serious shortage of orders. With the pressure of high temperature and off peak power consumption, it is normal to reduce inventory at both ends of production and marketing. Some enterprises predict that the "buy as you use" status of raw materials will be generally maintained before October. In the short term, with the end of the era of high cotton prices, cotton prices have fallen sharply to the 15000 level. In the face of the current cotton prices, the downstream textile enterprises' dynamic sales have not shown signs of improvement, and the situation of insufficient consumption is still continuing. Cotton prices are expected to keep up with the pressure of domestic cotton supply.