This week, domestic cotton prices first declined and then rose, while international cotton prices fluctuated and rose slightly; domestic cotton yarn prices fell within a narrow range, while international cotton yarn prices remained stable; polyester staple fiber prices fluctuated and rose.
1. Domestic cotton prices first declined and then rose, overall lower than last week
This week, the new cotton harvest progress exceeded 98%, and the vaccine is good The news continued to release and the sharp increase in confirmed cases of COVID-19 in Europe and the United States caused a stalemate in the market. On Thursday, Pakistan’s cotton production dropped to the lowest level in 35 years. The news gave Zheng cotton bulls confidence in speculation. The domestic cotton price trend first declined and then rose, and was overall lower than last week. . From November 16 to 20, 2020, the settlement price of the main cotton futures contract in Zhengzhou was 14,252 yuan/ton, which was the same as last week; the average price of the national cotton price B index, which represents the market price of standard grade lint cotton in the mainland, was 14,359 yuan/ton, which was lower than last week. 69 yuan/ton, a decrease of 0.5%. The average price of China’s cotton purchase price S index, which represents the average price of white cotton grade 3 seed cotton and lint cotton in the country’s main cotton-producing provinces (districts), is 12,797 yuan/ton (excluding processing fees), a decrease of 14 yuan/ton or 0.1% from the previous week. .
2. International cotton prices fluctuated and rose slightly
This week, vaccine optimism drove the strength of U.S. stocks, the U.S. dollar index weakened, and U.S. cotton weekly Poor export data put pressure on market demand, and international cotton prices fluctuated and rose slightly. From November 16 to 20, 2020, the settlement price of the main New York cotton futures contract was 71.60 cents/pound, an increase of 0.45 cents/pound or 0.6% from the previous week; the International Cotton Index represents the average CIF price of imported cotton at China’s main port. (M) The average price is 77.31 cents/pound, an increase of 1.07 cents/pound or 1.4% from the previous week. The import cost in RMB is 12,930 yuan/ton (calculated based on 1% tariff, including port miscellaneous goods and freight), which is an increase from the previous week. An increase of 173 yuan/ton, the international cotton price is 1,429 yuan/ton lower than the domestic cotton price, and the internal and external price difference has narrowed by 242 yuan/ton compared with last week.
3. Cotton yarn prices at home and abroad continue to be weak
This week, the domestic textile market has declined as a whole, and the order volume of most companies has dropped significantly, and yarn profit margins have declined. narrowed, domestic cotton yarn prices continued to be weak; the foreign cotton yarn market cooled down, and the export volume and price of cotton yarns from India and Pakistan simultaneously weakened; the competitiveness of foreign yarns declined due to the increase in freight prices, and the inversion of the price difference between domestic and foreign yarns expanded, and the average price of conventional foreign yarns It is higher than 221 yuan/ton of domestic yarn. The gray fabric market continues to be sluggish, with prices relatively stable; polyester staple fiber prices rise following the trend of PTA.
4. Outlook for the market outlook
Continuous vaccine news has brought optimistic expectations, and the impact of external factors has intensified. Pfizer and Moderna announced that their COVID-19 vaccines are 95% and 94.5% effective respectively, much higher than the 90% preliminary effectiveness data previously announced by the two companies. Pfizer has decided to seek approval from the U.S. Food and Drug Administration within a few days. If approved by the Food and Drug Administration (FDA) for emergency authorization, sales of this vaccine are expected to begin by the end of the year. Optimistic expectations will boost market confidence. In the international cotton market, the U.S. cotton harvest is nearly 70%, and the southeastern cotton area lags significantly behind. Last week, U.S. cotton export signings were significantly reduced and shipments dropped, which disappointed the market; Indian cotton supply was not greatly affected by rainfall and insect pests, and textile mills still have a large amount of remaining inventory; Pakistan Cotton production is expected to drop to the lowest level in 35 years; sales of Australian cotton and Brazilian cotton at ports have been cold due to strong prices, and West African cotton inquiries and signings are active. International cotton yarn continues to cool down, due to repeated overseas epidemics leading to reduced consumption. Although the current spread of the overseas epidemic has not been effectively curbed, optimism about the vaccine has brought optimistic expectations to the market. When the fundamentals are relatively clear, it is necessary to beware of the volatile effects of capital speculation and external market uncertainty.
The domestic economy continues to recover, and the cotton price trend has entered a critical period. The economic data of the National Bureau of Statistics in October were in line with market expectations. The national industrial added value growth rate remained at a high level of 6.9% year-on-year, an increase of 0.78% month-on-month. Total retail sales increased by 4.3% year-on-year, 1.9% faster than the growth rate in September. percentage point. The People’s Bank of China’s 800 billion yuan excess MLF operation maintains market confidence. In the domestic cotton market, cotton picking has come to an end, and many places in Xinjiang are experiencing rain and snow, with the overall impact being limited; new cotton has entered the centralized processing stage. As of November 20, the national new cotton picking progress is 98.4%, and the national processing rate is 61.7% , Zheng cotton warehouse receipts increased by 40,000 tons compared with last week, indicating that the potential pressure on new cotton supply is still high. Under the dual impact of the end of Double Eleven and the counterattack of overseas epidemics, domestic and foreign orders for most companies have significantly decreased. Some companies have stated that if the market continues to shrink, they will take measures to limit production in due course. It cannot be ignored that as the capital market has abundant funds and the number of warehouse receipts has dropped by 61% compared with the same period last year, the pressure on the market has been reduced. The current price difference between domestic and foreign cotton is at a relatively high level of nearly 2,000 yuan/ton. As the arrival time of Xinjiang cotton approaches on December 1, it is still uncertain whether the price difference between domestic and foreign cotton can fall back to within 800 yuan/ton to meet the conditions for its development. The price difference trend of domestic and foreign cotton entered a critical window period this week.
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