Cotton has a phased increase in demand, but the advantage is not as good as last year
On Wednesday (March 8), it is understood that cotton prices experienced a rapid rise from March to June last year, and have entered a phased consolidation since July that has continued until now. However, the current low price is gradually rising. If it can exceed 17,000 yuan/ton, cotton prices are expected to rise further.
Insufficient production and demand, but imports will eventually need to be supplemented by national reserves
The rules for replenishment from the state reserve are quantitative and timed, and it is not certain that the amount will be sufficient and on time. This makes it difficult for the supply and demand that originally had a gap to exceed the balance and reach a more relaxed level in the short term, especially during the lean period. situation, and then there is a situation where the stock price goes higher and higher in the early stage of selling stocks.
In 2016/2017, new cotton production was 4.5 million tons, and the total domestic cotton demand was about 7.7 million tons. From the perspective of production and demand this year, the gap is about 3.2 million tons. Adding in the import volume of 960,000 tons, there is still a gap of 2.24 million tons. The State Reserve’s sell-off began on March 6 and ended at the end of August, lasting 121 working days. Based on a daily delivery of 30,000 tons, a total of 3.63 million tons was released. From this point of view, supply exceeds demand and the overall situation is loose. However, in the early stages of stockpiling, many downstream companies are waiting for purchases, and demand may be relatively concentrated. However, supply is released in quantitative quantities every day, resulting in a periodic supply and demand imbalance. Coupled with uncertainty about the progress of subsequent public inspections and the amount of delivery, the market is prone to become passive. rise.
According to the situation in previous years, as the sale of reserves proceeds, when the auction transaction rate drops to 70%, especially below 50%, the market begins to generate pressure after the supply and demand relationship is straightened out. According to the market performance on March 6, the day of selling reserves, the transaction rate was as high as 100%, and the transaction price increase was as high as 2,740 yuan/ton. The results were not available on March 7, and the price increase was lower than the first day, but the transaction rate was still high. It can be seen from this that the market’s enthusiasm for buying has not diminished, and the market is still expected to rise. As the supply continues and the stocking phase ends, market supply and demand will gradually become more balanced or even relaxed, and prices will stop rising and fall.
Traders are actively participating and are bullish about the market outlook
Data shows that as of the end of February 2017, commercial inventories in Xinjiang and the mainland were estimated to be around 2.11 million tons. In the early days of last year’s stockpiling, at the end of April, domestic cotton commercial stocks were about 1 million tons. Apparently the supply is looser this year. However, commercial inventories are divided into cotton sorting enterprise inventories and traders’ inventories. This year, traders’ inventories have a larger proportion. It is estimated that about 900,000 tons of the 2.11 million tons of commercial inventories are in the hands of traders. Last year, the stocks were sold out. The former traders only had about 100,000 tons. If traders’ inventories are excluded, the remaining commercial inventories are only 1.2 million tons, which is slightly looser than last year but similar. Traders’ inventories are sensitive, and if they are generally bullish, they will accumulate strongly, which will support the market. Judging from the proportion of enterprises selling and selling transactions in the past two days, the number of non-fabric entrepreneurs accounted for 30.17%, showing that traders are actively participating and still have bullish expectations for the market outlook. In a certain period, not only the inventory pressure will not be released , and it will also promote market demand.
Downstream companies are not performing well
From the end of last year to the beginning of this year, fabric companies were still losing money, and the inventory of natural cotton fabrics by fabric companies was also at an all-time high of about 29 days, indicating that the overall downstream demand is still not optimistic. The cotton yarn inventory of fabric companies is still relatively low, about 16 days, indicating that their purchasing attitude is still relatively cautious. The cotton inventory of cotton companies is at a high level in recent years, generally around 650,000 tons, which shows that the urgency of textile companies to stock up is not that strong. This year’s cotton momentum is not as strong as last year’s.
Analysts said that this year’s situation before the reserve dumping is similar to last year’s, and there is a demand for periodic increases, but the geographical location and subject matter are not as advantageous as last year, and the intensity may not be as strong as last year. At the same time, combined with the technical aspect, we first look at the performance of the 17,000 yuan/ton mark. If it can break through, we look forward to 19,000 yuan/ton. As the State Reserve auction progresses in the market outlook, pressure will gradually emerge. The market is expected to rise first and then fall back. It is recommended that investors grasp the rhythm.
3.8 Today’s National Cotton Price Trends
Shandong Jining 1129 cotton price
16100 yuan/ton
Xuchang, Henan 1129 cotton price
17,300 yuan/ton
Shandong Dezhou 1129 cotton price
16,600 yuan/ton
Anhui Wuhu 1228 cotton price
15,400 yuan/ton
Anhui Anqing 1228 cotton price
15,450 yuan/ton
Chaohu, Anhui 1228 cotton price
15,450 yuan/ton
Anhui Bengbu 1228 cotton price
15,500 yuan/ton
Nantong, Jiangsu 1228 cotton price
15,500 yuan/ton
Xuchang, Henan 1228 cotton price
14,000 yuan/ton
Jiangsu Yancheng 1228 cotton price
15,500 yuan/ton
Shandong Dezhou 1228 cotton price
15,400 yuan/ton
Shandong Linqing 1228 cotton price
15,600 yuan/ton
Shandong Gaomi 1228 cotton price
15,600 yuan/ton
Xinjiang Ak 1228 cotton price
15,450 yuan/ton
Hebei Hengshui 1228 cotton price
15550 yuan/ton
Hebei Jizhou 1228 cotton price
15,500 yuan/ton
Changshu, Jiangsu 1228 cotton price
15,400 yuan/ton
Shandong Liaocheng 2129 cotton price
15750 yuan/ton
Shandong Jining 2129 cotton price
15750 yuan/ton
Ningbo, Zhejiang 2129 cotton price
16,700 yuan/ton
Shandong Heze 2129 cotton price
16,700 yuan/ton
Shandong Yuncheng 2129 cotton price
16,700 yuan/ton
Chaohu, Anhui 2129 cotton price
16,400 yuan/ton
Anhui Bengbu 2129 cotton price
16,400 yuan/ton
Dengzhou, Henan 2129 cotton price
16,200 yuan/ton
Xinjiang carat 2129 cotton price
16,000 yuan/ton
Xianyang 2129 Cotton Price
16,500 yuan/ton
Hubei Wuhan 2129 Cotton Price
17,200 yuan/ton
Hubei Zhongxiang 2129 cotton price
16380 yuan/ton
Xuchang, Henan 2129 cotton price
16,300 yuan/ton
Shandong Dezhou 2129 cotton price
16,300 yuan/ton
Shandong Linqing 2129 cotton price
16450 yuan/ton
Xinjiang Ak 2129 cotton price
15755 yuan/ton
Ningyang, Shandong 2129 cotton price
15,900 yuan/ton
Changshu, Jiangsu 2129 cotton price
16,300 yuan/ton
Shandong Gaomi 2129 cotton price
15,900 yuan/ton
Jiangsu Yancheng 2129 cotton price
16,200 yuan/ton
Hebei Baoding 2129 cotton price
17100 yuan/ton
Anhui Wuhu 2227 cotton price
14,700 yuan/ton
Anhui Huyi 2227 Cotton Price
14,800 yuan/ton
Anhui Anqing 2227 cotton price
14750 yuan/ton
Ningbo, Zhejiang 2227 cotton price
15,200 yuan/ton
Shandong Heze 2227 cotton price
15,000 yuan/ton
Chaohu, Anhui 2227 cotton price
14150 yuan/ton
Anhui Bengbu 2227 Cotton Price
14,200 yuan/ton
Nantong, Jiangsu 2227 cotton price
14850 yuan/ton
Xuchang, Henan 2227 cotton price
13700
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