In the past week or so, the price of Zheng Cotton’s main CF2201 contract has fallen below the integer mark of 17,500 yuan/ton from a high of 18,505 yuan/ton. Currently, the long and short parties are competing repeatedly around 17,500 yuan/ton. Affected by rising concerns among terminals such as clothing and foreign trade companies, cotton and cotton yarn were forced to accumulate strength at low levels and wait for counterattacks.
As the momentum of the main cotton contract to recover 18,000 yuan/ton has weakened, the enthusiasm of cotton yarn traders in Guangdong, Jiangsu and Zhejiang for price inquiries and stockpiling has cooled down, and the phenomenon of overstocking of some cotton yarns has increased. The differentiation of textile factories is becoming more and more obvious. Some large and medium-sized textile mills with relatively sufficient medium- and long-term orders, whose stocks of cotton yarn and gray fabric are significantly lower than the warning line and have sufficient capital flow have strong quotations. They are very cautious in adjusting their quotations or extending discounts to old customers. However, small and medium-sized cotton spinning mills with low cotton stocks (buy as you use them) and fewer orders have begun to lower the ex-factory price of cotton yarn (generally 300-500 yuan/ton). Even if the quotation is not adjusted, the actual order profit will be significantly expanded. At more than 300 yuan/ton, the cotton yarn quotations of some textile companies in Shandong, Henan and other places have dropped to the level before mid-August.
A cotton spinning factory in Zibo, Shandong Province said that since early August, the entrusted processing and outsourcing orders of some large-scale factories have continued to decrease compared with the previous months. Cotton yarn traders and weavers in coastal areas have The willingness of cloth mills to stock up has cooled down rapidly, and the impact of low-priced foreign yarn has also been greater in recent months. Therefore, in order to reduce the risk of accumulated inventory and revitalize working capital, small and medium-sized yarn mills have gradually reduced their prices for shipments as cotton futures prices have fallen sharply. . </p
