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China's cotton market

Views: 4     Author: Site Editor     Publish Time: 2021-08-30      Origin: Site

This week, domestic and foreign cotton prices have risen and fallen, and the average weekly price is still higher than last week's level; domestic cotton yarn prices have fallen slightly after the sharp rise in cotton prices, and outer yarn prices have continued to rise; polyester staple fiber prices have continued to fall.

1. Domestic cotton prices have risen and fallen

This week, at the beginning of the week, the country was still immersed in the high expectations of new cotton. After Wednesday, the overseas financial market plummeted across the board, and most commodities were sold off, causing domestic cotton prices to rise and fall. On August 16-20, 2021, the average settlement price of the main cotton futures contract of the Zhengzhou Commodity Exchange is 18,143 yuan/ton, an increase of 341 yuan/ton or 1.9% from the previous week; the national cotton price B, which represents the market price of standard lint cotton in the mainland The average price of the index was RMB 18,261/ton, an increase of RMB 568/ton from the previous week, or 3.2%.cheap cotton dyed fabric- DADITEXTILE

2. International cotton prices have risen and fallen

This week, the heavy rains in the cotton-producing regions in the United States at the beginning of the week caused supply concerns, and funds continued to promote international growth; after Wednesday, US retail sales and other data fell sharply, the global commodity market plummeted, and international cotton prices fell in response. On August 16-20, 2021, the average settlement price of the main contract of the Intercontinental Exchange Cotton Futures (ICE) is 94.2 cents/lb, an increase of 1.78 cents/lb from the previous week, or 1.9%; representing imported cotton from China’s main port to the shore The average price of the International Cotton Index (M) is 106.16 US cents/lb, an increase of 2.08 US cents/lb or 2.0% from the previous week, equivalent to RMB 17,105/ton (calculated at 1% tariff, including Hong Kong and other Freight), an increase of 327 yuan/ton, or 1.9%, from the previous week. The international cotton price is 1156 yuan/ton lower than the domestic cotton price, and the price difference between inside and outside is 915 yuan/ton wider than last week.

3. The transaction price of reserve cotton has risen steadily

This week, the auction of reserve cotton was running smoothly, and the transaction price increased steadily. On August 16-20, 2021, the average transaction price of cotton reserves was 17,879 yuan/ton, an increase of 416 yuan/ton or 2.38% from last week; the average transaction price of Xinjiang cotton was 17,994 yuan/ton, an increase of 463 yuan from last week. Yuan/ton, an increase of 2.64%; the average transaction price of real estate cotton was 17,672 yuan/ton, an increase of 354 yuan/ton, or 2.05%, compared with last week.

4. Domestic cotton yarn prices rose first and then fell, while international cotton yarn prices continued to rise

This week, the price of lint rose and fell, which drove the rapid rise of cotton yarn and then weakened slightly. Most cotton spinning mills' cotton yarn inventory remained low. It is heard that some yarn traders are still hoarding goods; due to the impact of the epidemic, sea cargo transportation continues to be tight. Support the price of imported yarn to continue to rise. At present, the price of conventional outer yarn is lower than domestic yarn at 535 yuan/ton; after the upstream cotton and cotton yarn rise, it will be difficult for downstream grey fabrics to receive orders, and the price of cotton fabrics has not followed the rise, and the market is waiting for it. Polyester staple fiber continued to fall along with crude oil prices.

5. Market outlook about cotton price

Risk aversion in the global financial market has risen suddenly, and beware of weakening international cotton prices. The rapid spread of the delta mutant strain has triggered concerns about weakening global demand. The Federal Reserve is discussing reducing the scale of bond purchases this year, risk aversion in the capital market has increased, and asset prices have weakened marginally. In the international cotton market, up to now, the budding rate of new cotton in the United States has reached 93%, and the proportion of good seedlings has continued to increase; the Indian monsoon rains are good, and the planting of new cotton has been 92% completed; the cotton harvest in Brazil has exceeded 60%. The current main variable is the weather.

Recently, shipping containers have continued to be tight, especially the accumulation of cargo in some European and American ports, and the delivery period and payback period of textiles and clothing have been passively postponed, and contract risks have risen accordingly. Terminal textile and apparel consumption declined. In July, the retail sales of clothing and apparel accessories stores in the United States fell by 2.59% month-on-month. In August, the consumer confidence index of the University of Michigan in the United States dropped unexpectedly, from the previous value of 81.2 to 70.2, a record low since 2011 . In summary, as the delta virus continues to ferment, short-term demand is expected to weaken, and risk aversion in the international financial market heats up. Beware of the weakening of the international cotton price margin.

The domestic new cotton picking is approaching, and the market waits and sees for the sentiment to heat up. According to data from the National Bureau of Statistics, the growth rate of some major indicators in July dropped. The added value of the textile industry above designated size fell by 1% year-on-year, and the textile, apparel and apparel industries increased by 8.1% year-on-year. 

A recent meeting of the Central Finance and Economics Committee pointed out that it is necessary to coordinate the prevention and resolution of major financial risks. In the domestic cotton market, Xinjiang's new cotton is currently growing normally and will soon enter the fluffing period. The cotton enterprises have gradually completed the maintenance and are welcoming the purchase of new cotton. With the callback after the cotton price hit a new high, Zheng Cotton's warehouse receipts accelerated its decline. 

As of August 20, the number of Zheng Cotton's registered warehouse receipts was 419,000 tons, a decrease of 35,000 tons from last week. According to the latest data from China Cotton Association, at the end of July, the country’s total cotton turnover inventory was about 1.731 million tons, a month-on-month decrease of 468,000 tons, which was lower than 260,700 tons in the same period last year. The downstream market is differentiated. Some companies are still producing pre-orders, and some textile companies in the textile market in Guangdong, Jiangsu and Zhejiang have reported that Christmas and Easter orders in developed countries such as Europe and the United States have been placed earlier than in previous years to ensure that they are shipped and delivered according to fashion. 

If the epidemic continues, foreign orders for textiles and clothing in the fourth quarter may be lower than expected. The new cotton picking time is approaching next week, and the market waits and sees to wait for the mood to heat up.

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