1. Price quotes

On November 1, the price of 21S cotton yarn in Shandong was RMB 30,033/ton, and on the 30th, the price of 21S cotton yarn in Shandong was RMB 29,033/ton, a decrease of 3.33% and a year-on-year increase of 37.44%.

2. Market analysis

The cotton yarn market continued to decline in November. On the 30th, the price of 32S cotton yarn was 30,533 yuan, down 3.38% from the previous month. The raw material inventory of downstream textile enterprises was about one month, and the operating rate was flat or slightly decreased. As of November 26, the yarn inventory of textile enterprises in major regions of the country was 20.5 days, an increase of 0.9 days from last week, an increase of 5.67% compared with the same period last year. An increase of 28.13%. Downstream market transactions are weak, orders for conventional products are average, shipments are slow, and there is no good performance on the demand side for the time being. The inventory of cotton yarn enterprises has gradually increased, and the demand for orders has not improved significantly. The phenomenon of accumulated inventory of finished products has caused the spinning mills to be cautious in purchasing cotton.

Since 2021, the price of cotton has oscillatedly increased, and the price difference between cotton polyester and cotton viscose has continued to widen and hit a record high. On November 30, the average price of China's cotton price index 3128B lint was 22,544 yuan/ton, the domestic price of 1.4D*38mm polyester staple fiber was 7,185 yuan/ton, and the domestic price of 1.2D*38mm viscose staple fiber was 13,960 yuan/ton. The price advantage of chemical fiber is obvious, and the substitution of pure cotton series products is enhanced.

In terms of futures, Zheng Cotton Futures’ 30-day settlement price was 20,565 yuan/ton, a decrease of 1,005 yuan/ton from the previous month; cotton yarn futures fluctuated downward, and the 30-day settlement price was 27,750 yuan/ton, down 1,705 yuan/ton from the previous month.

3. Upstream and downstream industry chain

The cotton market in November showed a trend of rising first and then falling. On the 1st, the price of 3128B lint was around 22,532 yuan/ton, and on the 30th, the price was around 22,640 yuan/ton, an increase of 135 yuan/ton or 0.60% from the end of the previous month. At the end of the month, the harvest of seed cotton basically came to an end, the processing of new cotton accelerated, sales were sluggish, and the cotton spot supply entered a loose state. According to data from the National Cotton Market Monitoring System, as of the week of November 26, 2021, 453,000 tons of lint were processed nationwide, a decrease of 10.3% from the previous month, and 129,000 tons of lint was sold, a decrease of 7.9% from the previous month. The purchase of raw materials by downstream textile companies mainly focuses on bidding for reserve cotton, and new cotton transactions are scarce. The cotton grey cloth market maintained a weak transaction, and the impact of power restrictions on textile companies gradually decreased, and the start of construction has gradually returned to normal. The recent increase in electricity bills in some areas has affected product profits. Some small textile companies have passively reduced their load and have a strong wait-and-see atmosphere.

At present, the upstream cotton market support is weakening, and downstream cotton spinning enterprises generally purchase orders according to orders. The market is full of wait-and-see sentiment. Generally, the market outlook is not optimistic. It is expected that the short-term cotton yarn market may continue to decline.

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