Price trend

Since December, the domestic cotton price has rebounded slightly, and the main contract of Zheng cotton rebounded from 13,000 RMB/tonn to 14,000 RMB/tonn and then fell. The spot market rose slightly. According to the monitoring of SunSirs, the domestic price of 3128B lint cotton was 14,993 RMB/tonn on the 20th, up 0.52% from the beginning of the month.

Analysis review

Recently, spot cotton was slightly stable. With the optimization and adjustment of epidemic prevention and control, cotton enterprises had a high enthusiasm for shipping. The progress of cotton processing, warehousing and public inspection was accelerated since the early and the middle of December. In the first half of the month, the transportation volume of highway and railway was nearly 140,000 tons. As of December 20, the newly increased daily cotton inspection volume was significantly higher than that of the same period in 2021/22. As of 24:00 on December 19, 2022, the national cotton inspection volume had reached 2.2685 million tons.

The inquiry of the downstream cotton yarn market increased, and the market improved to a certain extent compared with last week. Some cotton yarn enterprises had raised their quotations. Near the end of the year, the cotton yarn inventory of textile enterprises had declined significantly due to the periodic replenishment of the downstream stock. As of the 16th, the cotton yarn inventory of textile enterprises was about 18 days. However, the weak terminal demand was difficult to improve, and the willingness to start work declined. The grey fabric inventory continued to be high. As of the 16th, the inventory had lasted about 38 days, and the high inventory inhibited the enthusiasm of enterprises to start work. In November, the retail sales of clothing, shoes, hats, needles and textiles in China reached 127.6 billion RMB, a seasonal increase on a month on month basis, but a year-on-year decrease of 15.60%. Toward the end of the year, textile enterprises strictly controlled production and sales, and were cautious about purchasing lint.

Market outlook

Textile enterprises are optimistic about their consumption expectations for next year. However, due to the continuous impact of the recent epidemic, the operating rate of textile enterprises has declined. It is expected that the stock market will gradually cool down in late December as the textile enterprises are close to the holiday. On the whole, the current market is still weak in supply and demand, and cotton prices are expected to remain weak.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.