From October 10 to 14, 2022, domestic cotton prices continued to rebound, rebounding from a low of 13,340 yuan/ton to a high of 13,955 yuan/ton. Under the background that the macroeconomic environment is under pressure and new cotton is about to be launched in large quantities, cotton price performance strong.
That week, cotton prices rose slightly mainly due to the mismatch between supply and demand. At present, a large amount of new cotton has been delayed in the market, and the export of Xinjiang cotton is also somewhat unsmooth, resulting in an increasing gap in the basis of cotton of the same quality inside and outside Xinjiang. Downstream textile companies are currently maintaining rigid demand replenishment, and corporate raw material inventories remain low. Although procurement has not increased in volume, because it is a rigid demand order, procurement has not stopped. As downstream production continues, Xinjiang cotton stocks in inland warehouses continue to decline, and prices are gradually strengthening.
If we only look at domestic cotton commercial inventory data, downstream companies should not be short of cotton. The reality is that the epidemic has affected the efficiency of Xinjiang cotton transportation out of Xinjiang. A large amount of cotton has not been transported to inland consumption areas in time. The mismatch between cotton supply and demand has led to resource constraints in consumption areas. Supported spot prices.
That week, the firm spot price was closely related to the price of old cotton. In 2021, the spot price of Xinjiang cotton in inland warehouses will remain at around 16,000 yuan/ton, while the price of Xinjiang cotton in inland warehouses will be around 15,000 yuan/ton. The current market pricing is still based on 2021 Xinjiang cotton. Since new cotton has not yet been launched in large quantities, new cotton has not yet been launched in large quantities. Cotton price failed to become the market sales benchmark price in 2022. Therefore, Xinjiang cotton prices in 2021 have formed a strong support for market cotton prices. It is reported that the cost of machine-picked cotton in Xinjiang is now less than 12,500 yuan/ton, the pre-sale price of new cotton is around 14,000 yuan/ton, and the price difference between new and old cotton in Xinjiang is around 1,000 yuan/ton. Supported by spot prices, the price of machine-picked cotton in Xinjiang has risen to about 6.0 yuan/kg. However, due to market risk considerations, only a few ginning companies continue to purchase, and most companies have stopped harvesting and waited.
That week, the downstream cotton spinning market was still in a weak state. The quality of the “Golden Nine and Silver Ten” was insufficient, cotton yarn sales slowed down, inventories rose rapidly, and companies were under greater pressure to destock. Although yarn prices have increased due to the impact of raw materials, the reduction in yarn orders has restricted its price rebound.