Market Analysis: Pay Attention To The Future Market Trends Of Cotton Yarn At Home And Abroad

　　 International cotton prices fell slightly

This week, the weather in the US cotton producing areas continued to improve, and the proportion of drought decreased. The growth of US cotton production in the new year may exceed the previous market expectations. In addition, the sharp decline in US cotton contracted volume indicates insufficient consumption support, and the international cotton price fell slightly. On June 12-16, 2023, the average settlement price of the main contract of cotton futures in New York was 80.51 cents/pound, down 1.07 cents/pound from the previous week, or 1.3%; The international cotton index (M), which represents the average landed price of imported cotton in China's main ports, averaged 94.16 cents/pound, down 2.34 cents/pound from the previous week, or 2.4%; Converted into RMB, the import cost is 16023 yuan/ton (calculated by 1% tariff, excluding port miscellaneous and freight), down 313 yuan/ton or 1.9% from the previous week. The average price of domestic cotton is 1193 yuan/ton higher than that of international cotton, and the price difference is 499 yuan/ton larger than that of the previous week.

Domestic cotton yarn prices have stabilized from rising, while foreign cotton yarn prices have risen slightly

This week, domestic cotton yarn sales shrank slightly. Textile mills kept buying when they needed. Cotton yarn inventory gradually accumulated, and cotton yarn prices stabilized from rising. In terms of the international cotton yarn market, the recent continuous decline of the RMB exchange rate has increased the cost of cotton yarn import, and the price of imported cotton yarn has risen slightly. At present, the average price of conventional outer yarn is 421 yuan/ton higher than that of domestic yarn. The domestic grey cloth market continued to weaken, the difficulty of cloth factory shipment increased, and the price of all cotton grey cloth remained stable. Polyester staple fiber prices fell in shock.

　　 Future prospects

The export volume of American cotton decreased significantly, and the international cotton price continued to bear pressure. On June 14, the Federal Reserve decided to keep the target range of the federal funds rate at 5.00-5.25%, but the economic outlook released after the meeting suggested that interest rates might be increased twice this year; The European Central Bank decided on the 15th to raise all three key interest rates in the euro zone by 25 basis points. In the cotton market, global cotton consumption has not improved. According to the data of the US Department of Agriculture, as of the week of June 8, 2022/23, the net contracting volume of US upland cotton was 22400 tons, 79% less than that of last week. Indonesia and other countries are still experiencing destocking of cotton yarn, fabrics and end products. The global cotton supply is relatively sufficient. The Brazilian National Commodity Supply Company raised its forecast of Brazilian cotton output in 2022/23 to 2.98 million tons, an increase of 80000 tons year on year. The average unit yield is expected to hit the highest level since records. As of June 11, the sowing progress of American cotton in 2023 was 81%, 10 percentage points higher than that of the previous week. 49% of the cotton plants grew well, 3 percentage points higher than that of the same period last year. On the whole, the global macro situation is still uncertain. The international cotton market has strong supply and weak demand, and the international cotton price lacks upward momentum.

Downstream textile demand has weakened, and domestic cotton prices may have a callback. According to recent research, the domestic cotton textile consumption was good in May. The National Bureau of Statistics also showed that the retail sales of clothing, shoes and hats, and knitwear and textiles in May were 107.6 billion yuan, up 17.6% year on year. However, after June, the domestic cotton textile consumption gradually declined. According to the data of the national cotton market monitoring system, the national cotton sales volume from June 9 to 15 was 99000 tons, 29000 tons less than last week, Sales progress further slowed down. The operating rate of weaving mills in Foshan, Zhongshan, Guangdong, Shaoxing, Xiangshan, Zhejiang and other places continued to decline slightly, and the performance of knitting mills was even weaker. At present, the price difference of domestic yarn and cotton has dropped to about 6600 yuan/ton, and the spinning mill's immediate loss has expanded, and a few enterprises choose to take a holiday; The price difference between polyester and cotton has broken through the 10000 yuan mark, which may enhance the substitution of cotton. On the whole, the characteristics of domestic cotton textile consumption in the off-season have appeared. In addition, the upstream and downstream textile sectors have limited digestion capacity for high priced cotton, and domestic cotton prices may have a callback demand in the short term.