Domestic cotton prices fluctuated slightly. Recently, the textile market is not active enough, enterprises maintain a wait-and-see attitude towards the market outlook, limit production, increase the phenomenon of holidays, and maintain cotton as you buy. Domestic cotton supply is still abundant this season, and spot sales are slow. Since the spring sowing of cotton, the weather is relatively ideal, and the actual sowing area of cotton this year is higher than the previous prediction, and it is expected that the cotton yield increase potential in the new year is greater. In the short term, the domestic cotton supply and demand situation has not changed greatly, and the price may remain volatile.
The price of raw materials has risen, and the sales of cotton yarn are sluggish
Last week, the main raw materials of cotton mills rose, while the price of cotton yarn was weak and downward, coupled with the overall decline in cotton yarn sales, the purchase and sales of cotton mills were under pressure.
It is understood that last week, domestic cotton futures prices fluctuated upward, and the price center moved upward. At present, the lint price based on futures "point price" procurement has increased slightly by 50~100 yuan/ton compared with last week, while the price of polyester fiber has risen significantly. According to the person in charge of a blended mill, the price of polyester fiber in a chemical fiber factory was 7,950 yuan/ton, an increase of 300 yuan/ton from last week, an increase of 3.9%, and only within 100 yuan/ton for a long time.
At the same time, the price of cotton yarn was still weak last week, and the sales price of many varieties of cotton yarn was reduced by 50~100 yuan/ton. With the passage of time in the off-season, all kinds of cotton yarn are showing a slowdown in sales and an increase in inventory.
Last week in review
Last week, cotton prices at home and abroad fluctuated in a narrow range. On June 24~28, the average settlement price of the main contract of Zhengzhou cotton futures was 14,639 yuan/ton, an increase of 96 yuan/ton or 0.7% from the previous week; The average price of the national cotton price B index, which represents the market price of standard grade lint in the mainland, was 15,754 yuan/ton, down 104 yuan/ton or 0.7% from the previous week.
The average settlement price of the main cotton futures contract in New York was 74.21 cents/pound, up 1.87 cents/pound, or 2.6%, from the previous week; The average price of the international cotton index (M), which represents the average landed price of imported cotton in China's main port, was 82.81 cents/pound, up 2.27 cents/pound from the previous week, and the import cost of RMB was 14,279 yuan/ton (calculated according to 1% tariff, excluding Hong Kong miscellaneous and freight), up 391 yuan/ton from the previous week, or 2.8%. The domestic cotton price is 1475 yuan/ton higher than the international cotton price, and 495 yuan/ton narrower than last week.
The average price of domestic C32 carded cotton yarn was 22,285 yuan/ton, down 60 yuan/ton from the previous week. The average price of conventional yarn was 22,195 yuan/ton, down 81 yuan/ton from the previous week, lower than that of domestic yarn by 90 yuan/ton. The average price of polyester staple fiber was 7796 yuan/ton, up 291 yuan/ton from the previous week.
Situation outlook
(1) International market
The supply of cotton remains sufficient, and the market demand continues to be sluggish. The 2023/2024 Brazilian cotton harvest has begun, according to the Brazilian National Commodity Supply Company (CONAB) survey, as of June 23, the Brazilian cotton harvest rate was 6.9%, 4.6 percentage points higher than the same period last year, and the pre-sale ratio exceeded 60%. The recent depreciation of the Brazilian currency, the real, has strengthened Brazil's cotton export advantage. According to data from the Central Bank of Brazil, the US dollar bought 5.5223 against the real on June 27, up 5.5% from the beginning of the month, putting pressure on international cotton prices. The 2024/2025 U.S. cotton planting season is coming to an end, and the seedling situation has improved compared to the previous two weeks. According to the U.S. cotton growth report, as of June 23, the U.S. cotton budding rate was 28%, an increase of 3 percentage points year-on-year, and 56% of cotton was in good condition, an increase of 2 percentage points from the previous week, and cotton production is expected to increase strongly. On June 28, the U.S. Department of Agriculture predicted that the actual sown area of U.S. cotton in 2024 will be 11.7 million acres, far exceeding market expectations of 10.8 million acres, an increase of 14% year-on-year, according to the average yield of U.S. cotton in the past ten years of 855 pounds / acre, the average abandonment rate of 15.5%, the 2024/2025 U.S. cotton output will reach 3.84 million tons, an increase of 1.21 million tons year-on-year. Last week, the contracted volume and shipment volume of U.S. cotton exports failed to continue the growth trend of the previous two weeks, indicating that cotton consumption demand is insufficient. It is expected that international cotton prices will continue to operate under pressure.
(2) Domestic market
The domestic textile off-season atmosphere is strong, and the demand for cotton consumption continues to be weak. The downstream cotton yarn market continues to be weak, the operating rate of spinning and weaving enterprises continues to decline, the sales of finished products are not smooth, and the phenomenon of high temperature holidays in cotton spinning mills in some areas has increased. Last week, the price of polyester staple fiber followed the rapid rise of the price of raw material PTA, and the price difference between polyester and cotton narrowed to a low level of more than a year below 8,000 yuan/ton, but due to weak market demand, the supporting effect on cotton prices was not obvious. The domestic cotton spot supply is sufficient, the port imported cotton inventory is high, and the downstream demand is poor, resulting in the low willingness of enterprises to replenish the cotton warehouse. According to a survey of cotton processing enterprises by the national cotton market monitoring system, domestic cotton sales were 67,000 tons last week, the second lowest level in the past three months. In terms of cotton production, the survey of the national cotton market monitoring system shows that the actual sowing area of cotton in the country in 2024 will be 40.833 million mu, a year-on-year decrease of 1.4%, and the decrease is lower than the survey results of the intended planting area. According to the weather forecast, most of the plains in Xinjiang have recently experienced high temperatures above 35 °C, and the field management and water demand have increased. In the short term, the domestic cotton supply and demand situation has not changed greatly, and the price may remain volatile.
Edited and compiled from the China Cotton Storage Information Center
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