According to feedback from some cotton traders in Qingdao, Zhangjiagang and other places, due to the impact of ICE cotton futures falling below 90 cents and the corresponding correction of Zheng cotton contracts, inquiries and transactions of foreign cotton at the port have accelerated significantly compared with August, and some companies have received traceability orders. Cotton spinning mills are more enthusiastic about replenishing their stocks at low prices, and it is expected that bonded cotton stocks at ports will decline further by the end of September.
On the one hand, the growth of 2021/22 U.S. cotton and Brazilian cotton arriving in Hong Kong and warehoused in mid-to-late September is not obvious, and international cotton merchants and import companies have quoted more shipping futures in September/November; on the other hand, bonded cotton and The cargo basis remains stable, and the downward adjustment of spot goods is basically in sync with the main ICE contract. The direct cost of customs clearance for the 1% cotton import quota has dropped sharply compared with August/September. The inversion range of domestic and foreign cotton prices continues to narrow, and the US dollar quotation is outside The competitiveness of cotton has improved. In addition, there are currently too many cotton import quotas within the remaining 1% tariff, and they are mostly concentrated in the hands of large and medium-sized cotton textile companies that receive traceable export orders.
Judging from the quotations of some cotton companies, the net weight fixed price of US cotton 31-3 36 (strong 29GPT) and 31-3 37 (strong 28GPT) cleared in Qingdao Port, Nantong and other places on September 26-27 is concentrated at 20,800-21,000 yuan/ tons; the fixed price of Brazilian cotton M 1-5/32 (strong 28GPT) for customs clearance is 20,000-20,300 yuan/ton, which is still higher than the price of “double 28” (or single 29) machine-picked cotton in Xinjiang, Henan, Shandong, Jiangsu and other inland warehouses More than 4,000 yuan/ton. Affected by the continuous high-level diving of ICE, the current 1% tariff import direct cost of bonded US cotton 31-3/31-4 37 and bonded Brazilian cotton M 1-5/32 at the port has plummeted to 20,000-21,000 yuan/ton (a few Traders quoted prices above 21,500 yuan/ton), not only no longer inverted with the price of port customs clearance cotton, but even slightly lower, causing great concern among some cotton-using enterprises and middlemen. With the main force of ICE falling below 90 cents/pound, the contract purchase of bonded foreign cotton and cargo is expected to gradually start, which will be conducive to destocking and increasing storage capacity at ports.