Industry Data: China'S Cotton Market In The Past Week: Market Development Trend Analysis

This week, domestic cotton prices rose and fell, while international cotton prices weakened; The price of cotton yarn at home and abroad rose; The price of polyester staple fiber continued to rise.

　 1、 Domestic cotton prices rise and fall

On July 31, the General Office of the State Council forwarded the Measures of the National Development and Reform Commission on Restoring and Expanding Consumption, which boosted market confidence. In the first week of reserve cotton rotation, textile mills were actively bidding, and domestic cotton prices soared; On August 3, US time, Fitch's downgrade of the US sovereign credit rating led to a collective decline in the financial market and the price of cotton futures subsequently fell; On August 4, four national ministries and commissions jointly held a press conference to study the policy reserve with greater strength, and the decline of domestic cotton prices converged. On the whole, domestic cotton prices rose and fell, and the average weekly price was higher than last week. From July 31 to August 4, 2023, the average settlement price of the main contract of Zhengzhou cotton futures will be 17334 yuan/ton, up 150 yuan/ton from the previous week, or 0.9%; The national cotton price B index, which represents the market price of standard lint in the mainland, averaged 18008 yuan/ton, up 97/ton or 0.5% from the previous week.

　 2、 International cotton prices weakened due to shocks

This week, the high temperature weather in the United States continued to spread, and the ICE cotton rose after the sharp fall of the previous week. However, affected by Fitch's downgrade of the U.S. sovereign credit rating and the recent poor export data of American cotton, the international cotton price as a whole showed a trend of shock and weakness. From July 31 to August 4, 2023, the average settlement price of the main contract of cotton futures in New York was 85.06 cents/pound, down 0.70 cents/pound from the previous week, or 0.8%; The international cotton index (M), which represents the average landed price of imported cotton in China's main ports, averaged 97.17 cents/pound, down 1.08 cents/pound from the previous week, or 1.1%; Converted into RMB, the import cost is 16873 yuan/ton (calculated by 1% tariff, excluding port miscellaneous and freight), down 248 yuan/ton or 1.4% from the previous week. The domestic cotton price is 1135 yuan/ton higher than the international cotton price, and the price difference is 345 yuan/ton larger than the previous week.

　　 3、 The price of cotton yarn at home and abroad rose

This week, the activity of inquiry in the textile market increased, some traders narrowed the bargaining space, and the domestic cotton yarn prices continued to rise slightly. The turnover of outer yarn market is still weak, and the price of outer yarn continues to rebound with raw materials. The price of domestic cotton cloth rises with the price of raw materials. The price of polyester staple fiber continued to rise.

　　 4、 Future prospects

The tide of US debt issuance has intensified the financial market turbulence, and the international cotton price is facing substantial fluctuations. In order to cope with the worsening fiscal deficit and continue to provide a cash buffer, the US Treasury Department issued a statement on July 31. It is expected that the net issuance of bonds in the third quarter will reach $1.007 trillion, a record high in the same period, and $274 billion higher than the estimated value at the beginning of May. With the release of medium - and long-term bonds by the US Treasury, the liquidity of the US banking system is facing more severe challenges. As for the cotton market, as of July 30, 41% of American cotton had achieved good growth, down 5 percentage points from the previous week and 3 percentage points higher than the same period last year. In terms of the textile market, the July survey report of the International Textile Manufacturers Federation showed that although the order volume in July increased slightly, the textile mills, printing and dyeing, and dyeing and finishing were all negative news. In the short term, affected by the turbulence of the international financial market, the continued downturn in consumption and the changing weather conditions, it is expected that the international cotton price will fluctuate significantly.

The textile market showed signs of improvement, the turnover of reserve cotton rotation was active, and the domestic cotton price was supported by consumption. According to the data of the National Bureau of Statistics, the PMI of China's manufacturing industry in July 2023 was 49.3%, up 0.3 percentage points from the previous month. The prosperity level of the manufacturing industry continued to improve, but it was still in the contraction range. On August 4, the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China and the State Administration of Taxation said at a joint press conference that they would do a good job in macro-control and promote high-quality economic development. In terms of cotton market, the high temperature weather in Xinjiang is still continuing. According to Akesu cotton processing enterprises, the current weather is conducive to the acceleration of cotton growth, and hand picked cotton in southern Xinjiang is expected to be picked successively around the end of August. Recently, after the orderly launch of reserve cotton rotation, textile mills have actively bid, and the market supply of cotton before listing in the new year has been guaranteed. Recently, the inquiry in the textile market has increased, and the overall domestic sales orders have not improved significantly. Some foreign trade enterprises have increased their orders in small quantities, especially in the home textile market. In the short term, the improvement of the domestic textile market will provide some support for cotton prices.