According to feedback from cotton traders in Qingdao, Shanghai, Zhangjiagang and other places, with the continuous downward breakthroughs of ICE cotton futures and Zheng cotton last week, the proportion of foreign cotton cargo, bonded cotton and customs clearance cotton pending orders and price point trading volume accounted for More than 80%, which is significantly better than in mid-to-late February; inquiries and transactions of Brazilian cotton and US cotton quoted in US dollars are slightly better, while shipments of Indian cotton and Brazilian cotton quoted in RMB are slightly stronger.
A medium-sized cotton company in Huangdao said that last week, foreign cotton signings and transactions at the port showed a trend of “loose at first and then tight”. Overall, the growth of inventories in bonded warehouses and transit warehouses was not obvious (both internal and external market corrections, China Textile companies and middlemen are slow to obtain goods, so some exporters and import companies have slowed down shipments and delivery progress); however, due to the tight supply of 1% tariff quotas, the resources for bonded Brazilian cotton, Indian cotton, and US cotton to quote RMB prices are becoming increasingly large. More and more are coming (the buyer needs to bring his own 1% quota for customs clearance), but the transaction is not smooth and ideal.
As for the reasons for the bottoming out of ship cargo, port foreign cotton spot inquiries and transactions, industry opinions can be summarized as follows:
First, the price difference between domestic and foreign cotton has narrowed significantly. The competitiveness of Brazilian cotton and US cotton has improved at low prices. Since late February, ICE has dropped from 95.60 cents/pound to 85.67 cents/pound, a drop of 10.39%, which is significantly greater than that of Zheng cotton. However, most export companies and traders have not adjusted their basis, so point-price purchases have become Chinese purchases. The most important means for the country;
Second, customs clearance of Brazilian cotton and Indian cotton also poses a threat and impact to the sales of Xinjiang cotton in the mainland. In the past two days, the net weight quotation of M 1-5/32 in Qingdao Port was 15,300-16,500 yuan/ton; the net weight quotation of M 1-1/8 Brazilian cotton was 16,750-16,950 yuan/ton, while the “Double 28” net weight of Jiangsu, Shandong and other inland warehouses in Xinjiang The quoted weight of machine-picked cotton is 16,750-16,850 yuan/ton (there are slight differences due to different impurities and indicators), and the advantage of Xinjiang cotton has weakened;
Thirdly, the U.S. government’s import ban on Xinjiang cotton products has not been lifted. It is reported that the United States will increase review and enforcement efforts, and some export-oriented enterprises and agents will increase inquiries and purchases of foreign cotton. The recent surge in cotton yarn prices in India, Pakistan and other countries is also an important reason for Chinese companies to “reduce yarn and increase cotton” in their purchases. </p
