At the beginning of the year, the cotton that was as high as 20,000 yuan/ton was now "empty"?

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Recently, the direction of the domestic market is confusing. Returning from the Spring Festival holiday, Zheng cotton prices and spot prices have risen in tandem, detonating the hearts of the market, and there are many people who are bullish on the market. Some people even positioned the 2017 cotton price to 19,000-20,000 yuan / ton; in recent days, the market has been steadily consolidating, Zheng cotton in the 15500-16000 yuan / ton range, the spot also seems to touch the "ceiling." The market turned happy again.

After the big joy, is it a great sorrow? The market was confused at the moment and couldn’t figure it out. At present, the market is now two major doubts. Recently, cotton prices have risen sharply or have become duckweed.

The first big doubt: the spot price has risen sharply, and there is no downstream demand.

On the 10th, most textile mills in the Lu, Henan and Henan regions are still operating at full capacity, but everyone has a negative or temporary wait-and-see attitude on whether the raw materials are purchased in large quantities. The price of C21S, C32S and C40S on the 10th cotton yarn in Dongying, Shandong Province was 22,000 yuan/ton, 23300 yuan/ton and 24,500 yuan/ton, respectively, both rising by 200 yuan/ton from last Friday. However, the textile enterprises feel that it is very difficult to raise the price of cotton yarn. The downstream fabrics and fabrics companies are almost incomparable, and they are not allowed to move in the unit price.

Many ginning mills and cotton merchants in Xinjiang and the Mainland have reported that during the period of soaring cotton, the actual transaction was very limited. Although everyone tried to promote every business, the downstream enterprises were arrogant and held a wait-and-see attitude. Caused the cotton to "empty".

Even some textile enterprises believe that the current cotton price exceeds the actual market price of 500-700 yuan / ton, is a virtual rise, is exaggerated, will be like duckweed, will go with the waves.

The second big question: cotton supply and demand gap is large, supply and demand are tight?

What is the supply and demand for cotton in 2016/17? The market has two different perceptions:

1. It is considered that the gap between supply and demand this year is large.

According to statistics, the annual cotton output in 2016 was 5.343 million tons, a decrease of 4.6% from 2015. This year, imported cotton is still limited to 84,000 tons of 1% tariff. In principle, there is no other. Therefore, the supply of cotton this year is 534.3+89.4=62.37 million tons. The demand is between 8.5 and 9 million tons, and the gap between supply and demand is as high as 2.763 million tons.

Such a big gap can only be filled by taking out the national cotton storage. However, the National Reserve Cotton Wheel still allows traders to participate. According to the situation in 2016, if traders rush to shoot, it will continue to cause textile enterprises to “eat not enough”. Market cotton supply is still tight.

2. There is no gap in the market, and textile enterprises can use cotton to be assured.

According to the announcement of the State Reserve Cotton Exporter, the company will fully meet the textile cotton for textile enterprises. The daily volume and the round-off time will be adjusted according to the market conditions. That is to say, how much cotton is needed in the market, and how much the National Reserve will rotate. . With the stock of nearly 9 million tons of cotton in the country, there is basically no problem in using cotton in 2017.

These two views are mutually reinforcing. After a while, the east wind overwhelmed the west wind, and the west wind overwhelmed the east wind, bringing great uncertainties to the market.

In summary, the cotton market has two major doubts, making the first quarter of cotton into a fascination. However, the industry is reminded that the risk of cotton in 2017 is relatively high, and the textile enterprise owners still have to observe more and pay more attention to it, and carefully drive the ship for thousands of years.

Source: China Storage Cotton Information Center, Yarn Master