1. Price quotes
On the 16th, the price of 3128B lint was around 18079 yuan/ton, and on the 20th, the price of 3128B lint was around 18510 yuan/ton, an increase of 431 yuan/ton from last Friday, or 2.38%, and 8.09% month-on-month.
2. Market analysis
The spot price of cotton futures has repeatedly hit new highs. On August 20, the average price of China's cotton index 3128B grade was 18,497 yuan/ton. The current reserve cotton continues to rotate, the market for high-quality cotton is still relatively short, and the enthusiasm of enterprises in transactions is not diminished. The resonance effect of the rising price of reserve cotton is strong, supporting the cotton price trend in the spot market. On the one hand, the upward momentum of the cotton market comes from the warm-up of domestic gold, nine and silver ten, downstream demand continues to pick up, orders increase, cotton consumption increases substantially, and commercial inventories gradually fall. The latest data shows that cotton stocks are 49.23%, a year-on-year decrease of 1.5%. On the other hand, after Xinjiang cotton went on the market in 2020, there has been a large-scale rush for the local harvest, and the price of seed cotton has also been rising. Zheng Mian’s market price rose first and then fell this week. The settlement price on the 16th was RMB 18,070/ton, and the settlement price on the 20th was RMB 17,805/ton, down 265 yuan/ton. At present, the macro environment is weakening, the market confidence is insufficient, the commodity market is weakening, and the Zheng cotton market is falling.
Internationally, in the August monthly supply and demand report released by the US Department of Agriculture, it lowered the cotton production in the United States and the world in 2021/2022, with an estimated monthly decrease of 536,000 bales to 17.26 million bales. This has led to estimates of US cotton exports and year-end inventory reductions by 200,000 bales and 300,000 bales, respectively. The expected reduction in global cotton production, rising consumption, and reduction in ending stocks will gradually increase domestic and foreign cotton prices. The Fed's decision to reduce stimulus measures this year caused the US dollar to rise to this year's high. On the 19th, the ICE futures cotton plummeted. The US dollar interest rate hike is getting closer, and a commodity correction is imperative.
3. Downstream industry chain
As the price of cotton rose to a high level, the market chill began to appear, the downstream textile companies had insufficient new orders, the wait-and-see sentiment increased, and the resistance to the downward transmission of prices increased. The polyester industry chain market is weak, and prices have continued to fall since August, which has shaken the market's confidence in the continued rise of the cotton market to a certain extent. At present, the start-up of yarn companies is relatively stable, and product inventories are still at a low level. In addition, the market is still looking forward to the approaching textile peak season and the return of orders, and short-term market fluctuations remain stable.
