Price trend
According to the monitoring of SunSirs, the lint market fell from a high level in 2022, and the price fluctuated greatly during the year. The highest point of the market was about 23,029 RMB/ton on February 15, and the price was 14,949 RMB/ton as of December 21, a decline of 32.68% compared with the lint price of 22,206 RMB/ton at the beginning of the year. The lint market was weak. At present, the market has fallen back to the price in April 2021, giving up the increase brought by the high purchase price of seed cotton last year.
In terms of futures, ZCE cotton futures were greatly affected by the international cotton futures prices. In the first half of the year, the main market of ZCE cotton futures was at a high level, with the highest point above 22,000 RMB/ton. In the second half of the year, due to the sluggish macro negative demand, ZCE cotton futures had a wide range of fluctuations. As of December 21, the settlement price of the main contract was 14,010 RMB/ton, down about 32% from the beginning of the year. In the first half of the year, ICE cotton reached a new high of 10 and a half years, breaking through 150 cents at the highest level, and then the market fluctuated downward. As of December 20, the settlement price of the main contract was 87.84 cents, down 22.4% from the beginning of the year.
According to the price trend of lint in 2022, it can be divided into the following three stages:
Volatile rise (January-March): According to the monitoring of SunSirs, the price of lint at the beginning of the year was 22,206 RMB/ton, and then the market rose in a volatile manner, reaching the highest point of 23,029 RMB/ton in the year on February 15, and the price was 22,940 RMB/ton by the end of March, with a range increase of 3.30%. From January to the middle of February, the lint market continued its previous rise. The downstream demand of Southeast Asia was strong, and the domestic consumption was expected to improve. With the linkage between domestic and foreign markets, the lint market rose steadily. At the same time, the international cotton price showed a strong performance, and the Indian cotton market rose continuously. Driven by the external market, the domestic current futures market rose together. Subsequently, the pressure of high cotton prices on the downstream gradually increased, and the future demand was uncertain. The lint market was in shock and consolidation.
Sharp decline (April-July): According to the monitoring of SunSirs, the price of lint was 22,922 RMB/ton on April 1, and then the market fell sharply. By the end of July, the price was 15,830 RMB/ton, down 30.94%. The lint market was weak in April, and the high cotton price continued to deviate from the downstream weakness. The domestic textile industry continued to cool down, and the epidemic situation became the focus of attention. In May, the international cotton price fell from a high level, and the decline of domestic cotton market increased. Downstream yarn inventory accumulated, at the same time, most of the cotton textile industry was transformed to blending as a whole to reduce the cost pressure, and the purchase of cotton reduced. In June and July, the domestic textile market entered the slack season, and the decline in cotton prices continued to expand. With the entry into force of the Xinjiang cotton ban, the prospect of overseas textile orders was worrying. With the start of the rotation of reserve cotton on July 13 and the rise of commodity prices, the decline in cotton prices slowed down in the second half of the month.
Downward in shock (August to December): According to the monitoring of SunSirs, the price of lint was 15,871 RMB/ton on August 1, and then the market went into shock. By the end of December, the price was 14,949 RMB/ton, down 5.81%. In August, the traditional textile off-season, the demand side was weak, the high temperature superimposed power rationing, and the cotton price was weak in shock. The lint market in September was weak and downward. The traditional peak season had not appeared. The domestic demand side had shrunk. The continued interest rate increases in European and American countries weakened the global economy, making it difficult to improve the terminal consumption. The decline in international cotton prices was greater than that in China. In October, the purchase price of seed cotton started at a low price and then went up. The listing progress of new cotton was significantly slower than that in the same period of previous years. The phased supply pressure was less than expected. The poor transportation of Xinjiang cotton made the cotton resources in the mainland slightly strained, and the domestic cotton price rose slightly. The lint market fell again in November, the new cotton cost was basically finalized, the supply was gradually relaxed in the later period, and the commercial inventory continued to increase. In December, the epidemic control measures were gradually liberalized to boost market confidence, textile enterprises resumed production, downstream delivery improved, and cotton prices fluctuated widely.
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