After a week of adjustments, Zheng Cotton finally stopped falling and stabilized, with the CF2105 contract price regaining 15,200 yuan/ton. Judging from the increase in positions on the market, the market has a high enthusiasm for buying at the Wanwu mark, which is superimposed on downstream cotton yarn orders. It is stable and improving, with strong support at the 10,000-five mark. However, as new driving conditions have not emerged in the future, cotton prices will remain strong and volatile.
Overseas epidemics continued to increase rapidly last week. According to overseas news, as of about 6:30 on January 18, Beijing time, there were a total of 95,405,331 confirmed cases of new coronary pneumonia and a total of 2,038,019 deaths worldwide; there were new confirmed cases in a single day worldwide. There were 610,610 cases and 10,387 new deaths. The domestic situation is not optimistic either, with multiple sporadic outbreaks also posing severe challenges to epidemic prevention and control.
Although vaccinations have begun around the world, including China, there are endless debates over the safety, effectiveness, and gap between production and demand of vaccines. Distant water cannot save nearby fires, and the speed of the epidemic development has panicked the market. Commodities were under pressure last week, and cotton was not immune. In addition, the United States announced a ban on the import of Xinjiang cotton and its products, which caused a shock in the cotton market. The largest drop in a week reached nearly 700 points.
Just when the market expected cotton prices to continue to plummet, Zheng Cotton bottomed out at the opening today and gave it a slap in the face. The author believes that there is no basis for a sharp drop in cotton prices in the short term. First of all, the epidemic continues to ferment, but humans have begun to inject vaccines. It cannot be said that the worst period has passed, but there will be no worse situation than before. Judging from the current economic growth forecasts in various countries around the world, the expected economic growth targets of various countries in the world in 2021 have shown a significant increase year-on-year, and they are relatively optimistic about recovery.
In addition, downstream demand remains stable at this stage. Orders from textile companies are all scheduled to February and March. The supply of yarn products exceeds demand and there is basically no inventory. While consumption is stable and improving, cotton prices are supported, and even short-term negative effects are difficult to achieve. There was a big drop. The U.S. ban on imports of Xinjiang cotton and its products is nothing new. The market has long expected it. According to past analysis, the impact will be limited and will not reverse the trend of Zheng cotton. Of course, Zheng Cotton’s rise will not be smooth sailing. The previous high of 15,600 yuan/ton has already shown strong pressure. As for when the breakthrough will be achieved, we still need to wait for the market to give the final answer. </p
