Reserve cotton hot textile market into the off-season

Recently, the spot price of domestic lint temporarily remained stable. As of June 14th, the factory quotations for lint from Hebei and Shandong local ginning factories were at RMB 12,100-12,800/ton (mainly grades of 3128C and 3128B), which were unchanged from last week. The reserve cotton turnover is still hot and the textile market has entered the traditional off-season. The author believes that the current market is not only conducive to supporting the spot market but also factors that restrict the rise of cotton prices. The specific analysis is as follows:

Supporting cash cotton spot market favorable factors:

1, ** prices stop falling rebound

Supported by the weather and the decline of the US dollar, rainfall and flooding in the southeastern United States may affect crops. US cotton prices rose last week. As of June 9, the US cotton December contract closed at 65.07 cents per pound, compared with 63.19 US dollars in the same period last week. Points/lbs rose 1.88 cents/lb, and Zheng Cotton also rebounded sharply. On June 13th, Zheng Cotton's main contract CF1609 contract closed at 13,025 yuan/ton, up by 245 yuan/ton, and the price rebounded and rebounded. The lint cash market has added a favorable atmosphere.

2, lint cash shortage, manufacturers are still very strong mentality

In the new year, cotton planting is expected to be sluggish, coupled with the fact that the current price of seed cotton is still strong in the market, the cost is increased, domestic ginning mills have a meager profit margin, and most manufacturers are still shut down. Manufacturers hold relatively limited supplies in their hands, leading to ginning factories The willingness to sell at low prices is not high, and the price is still psychological, supporting the lint market.

Constraints on the unfavorable factors of spot cotton spot market:

1, the textile market entered the traditional off-season, raw material procurement enthusiasm is not high

At present, the textile and apparel market will enter the traditional off-season, and there will be no substantial growth in downstream orders. Basically, the orders will take the lead in the previous period. Spinning companies will cut some of the yarn prices to promote sales, and the decline in the number of spinning yarns is relatively high. Some textile companies are on the market outlook. Pessimistic, wait-and-see psychology.

2, reserve cotton round out of the deal, hit the market lint market

At present, the reserve cotton turnover is still hot. As of June 14, 2015/2016, the cumulative stock of reserve cotton was 788,900 tons, and the transaction rate was 98.16%. Of which, the cumulative sales of domestic cotton reached 492,700 tons, and the cumulative sales of imported cotton reached 296,100 tons. With the turn into normalization, more and more outbound, a large number of state-owned cotton in the latter stage flowed to the market, putting pressure on market lint prices.

To sum up, the author believes that the current price of lint temporarily hard to rise, but the high cost and limited supply of spot also support the spot lint is difficult to fall, it is expected that the spot price of lint in the near future will be stable or narrow fluctuations in the operation.