1. price quotes
The June cotton market experienced a process of first rising and then falling, and then rising again in the second half of the month. On the 1st, the price of 3128B lint was around 15791 yuan/ton, and on the 30th, the price was around 16159 yuan/ton, an increase of 2.33% and a year-on-year increase of 35.86%.
2. Market analysis
Domestic: China's cotton price index 3128B level market rose, the price at the beginning of the month was 15,780 yuan / ton, the price at the end of the month was 16,097 yuan / ton, an increase of 317 yuan / ton, an increase of about 2%. Zheng Mian’s main contract has a daily settlement price of 15,470 yuan/ton and a 30-day settlement price of 16,020 yuan/ton, an increase of 550 yuan/ton, or 3.56%. In the middle of the month, the domestic policy of ensuring supply and stabilizing prices continued to be introduced to promote the formation of reasonable prices in the bulk commodity market. The domestic cotton spot price turned from rising to falling, and the domestic cotton yarn price turned to a slight decline. In the second half of the month, Zheng cotton futures prices rose, and cotton spot prices rose.
According to customs statistics, my country imported 170,000 tons of cotton in May 2021, a month-on-month decrease of 60,000 tons, a decrease of 26%, and a year-on-year increase of 100,000 tons, an increase of more than double. In May, my country imported 168,700 tons of cotton yarn, a month-on-month decrease of 27.12% and a year-on-year increase of 66.24%; exports of 24,800 tons of cotton yarn, a month-on-month decrease of 8.95%, and a year-on-year increase of 66.44%; net imports of 144,000 tons, a month-on-month decrease of 29.54%, year-on-year An increase of 66.21%.
International: Supported by the additional US$6 trillion stimulus package launched by the United States, international cotton prices have shown a clear rebound after falling. The international cotton price index rose, and ICE futures also rose simultaneously. In the middle of the month, the US Department of Agriculture released a monthly report on global cotton supply and demand forecasts. In 2021/22, the global ending inventory was reduced by 370,600 tons to 19.443 million tons. The production and consumption data for 2021/22 were the same as the previous month. With the decline in the beginning inventory and the increase in exports, the ending inventory is currently reduced by 43,600 tons to 631,000 tons. Stimulated by data, international cotton prices continue to rise.
In mid-month rumors of the Federal Reserve raising interest rates, U.S. stocks fell in response, and international cotton futures prices went down accordingly, and spot prices fell significantly. In the following week, the Federal Reserve eased its interest rate hike speeches, and the market's cautious mood eased, pushing the US stock market to a record high, superimposing the hurricane rainfall in the US cotton area, supporting the rise of international cotton prices.
3. Downstream industry chain
Summer is the traditional textile off-season. Although the textile market has begun to enter the traditional off-season, the overall sales are relatively smooth, and the yarn mills have not been heavily stockpiled. The rise of Zheng Cotton and cotton yarn futures and the low inventory of yarn mills supported the continued stability of yarn prices, and textile companies maintained a relatively high operating rate. There are few new orders in the cotton yarn market. Due to the tight overseas freight, the transaction price of some imported yarns has risen. The downstream grey fabric market actually has fewer transactions, mainly in small batches or re-orders. As cotton prices are rising, the willingness of downstream replenishment is not high, and textile mills maintain the position of just-needed purchasing. It is expected that the market will be stable in the short term.
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