Price trend

Recently, the performance of new orders in the textile market was poor, and the cotton market fluctuated downward. According to the monitoring of the Business News Agency, the price of grade 3128 lint was 15,869 RMB/ton as of the 13th, down 53 RMB/ton or 0.34% from the price of 15,922 RMB/ton at the beginning of the month.

Analysis review

In the latest global cotton supply and demand report, the United States Department of Agriculture's expected cotton output and consumption in China were both increased month-on-month, and the cotton output in 2022/23 was expected to be 6.25 million tons, with a month-on-month increase of 109,000 tons, or 1.8%. Relevant domestic institutions also increased the expected value of China's cotton production in 2022/23 from a month-on-month basis, and increased the output of this year from 170,000 tons to 6.55 million tons. The pressure on China's cotton supply side was still high. As of the 11th, Xinjiang lint had been processed 5.3272 million tons, up 2.05% year on year, and the new cotton public inspection was gradually coming to an end. At present, the domestic supply of new cotton plus old cotton is sufficient, and the pressure on cotton prices is also present. In 22/23, the global cotton market still maintained a loose supply pattern, and the international cotton price is expected to remain under pressure before the new season planting.

The global consumption of cotton continued to decline. The global consumption was reduced by 42 thousand tons to 24 million 94 thousand tons, which was a huge decline of 1 million 454 thousand tons. At the same time, USDA's consumption for 2022/23 was expected to be 7 million 838 thousand tons, 109 thousand tons or 1.4% higher than before. Currently, the orders of the downstream spinning enterprises were not good, and the wait-and-see mood for cotton raw materials purchase was relatively strong.

The market of the downstream cotton gauze was lack of motivation to rise, and the atmosphere of market transaction was general. Enterprises went along with the market and prepared goods according to their needs. According to the specific varieties, it was relatively good to deal with the chiffon with high branches and normal combs. There was a certain gap between the current order recovery situation and the expected one. The number of big orders and long-term orders was still small, and the market mood was slightly lowered. The low stock and the low profit level were not good, but the market was still optimistic, and the clothing enterprises had a strong will to raise the prices.

Market outlook

After the Spring Festival, the number of new orders was limited, and most of them were short and small orders. The speed at which the finished goods were removed from stock was slow. Overall, with the arrival of the peak season of traditional spinning, under the condition of the low stock of the downstream raw materials, it is hopeful to receive a wave of replenishment stocks. In the short run, it will continue to maintain the trend of vibration adjustment.

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