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More than half of April, the current domestic local yarn shipments improved, some small orders and short orders, and the sales margin of textile enterprises recovered. Yesterday, Zheng Mian concussion strong operation, CF2409 contract opened 16355 yuan/ton, the lowest 16305 yuan/ton, the final rose 55 points to close at 16395 yuan/ton.
Domestic situation
Beginning in mid-April, the amount of seed cotton resources in the mainland is obviously insufficient, and the purchase price of seed cotton in Shandong is strong, and the purchase price of seed cotton with better quality is 4.30 yuan/catty, 40% of the cloth, 12% of the water content, and the price of wool cottonseed has fallen this week, and the overall factory price is 1.55-1.56 yuan/catty. At present, there are less than ten cotton enterprises in operation, and the factory quotation for processing weak three-level lint is 16600-16800 yuan/ton, and the downstream procurement is on demand. This week, futures cotton yarn low shock adjustment, of which CY2405 main contract closing price on Thursday to 21305 yuan/ton, futures cotton yarn low fall, weak spot market stable operation. Cotton yarn local market purchase and sales activity slightly improved, but the overall cotton yarn inventory is still high, even in April textile load reduction pressure is not obvious, but with the depth of the off-season, it is expected that May to June textile load there is a further decline in the risk. According to the feedback of some cotton textile enterprises in Henan, Shandong, Jiangsu and other places, since early April, the inquiries/transactions of C21-C40S yarn have shown a warming momentum (40S yarn sales are slightly better than other varieties), and the demand for air spinning and high-support yarn of 50S and above is relatively weak, which requires "time for space", but the overall cotton yarn market atmosphere is gradually improving. The phenomenon of textile enterprises and cotton yarn traders taking the initiative to reduce prices and sell is rare. At present, Zheng cotton CF2405 contract continues to consolidate in the 16000-16300 yuan/ton interval, low and medium count cotton yarn profits and even production and sales "upside down", cotton yarn sales have shown signs of a stage recovery, some cotton mills in the branch of tight spinning, Siro-spinning quotation tentative rise, but by the weaving factory and consumer terminal strong resistance. Therefore, textile enterprises can only consider sales volume first, and then consider profits.
International situation
January-february in the United States cotton export sales data is strong, the United States cotton ending inventory decline, the global cotton supply and demand relationship tightening, the Federal Reserve interest rate cut expectations, ICE cotton rose significantly, the United States cotton main breakthrough 100 cents/pound mark, hit a new high in more than a year, the domestic cotton market has played a significant role. Later, with the profit taking of funds, and the price advantage of US cotton prices continued to rise, China, Vietnam, Pakistan and other countries reduced the import of US cotton, and the main high level of US cotton fell, bringing some pressure to the domestic cotton market. April USDA report raised 2022/23 global cotton production and ending inventory, this year's global cotton supply and demand are still expected to maintain inventory, the impact of the recession in Europe and the United States on global textile demand has appeared, but after the second quarter of the northern Hemisphere began to sow new cotton, the United States cotton production there is speculation space, international cotton prices are expected to be supported by the supply side, In the second quarter, the high probability of continued range volatility.
Second quarter outlook
Reviewing the first quarter, the cotton market entered the warehouse cycle, and the bottom center of gravity of cotton prices rose, showing a wide shock market. However, the recovery of downstream demand is slow, and the characteristics of the peak season are not bright. Entering the second quarter, the stage performance of the cotton market supply side is relatively sufficient, but the market has entered the normal storage cycle, the pressure to the storage has been released, and 2024/25 cotton has begun to enter spring sowing, the market still has weather premium expectations, and the cotton price bottom is still supported. Due to the rise in weather temperatures, downstream demand is slightly started, the market is slightly smooth, but the continuity of follow-up orders remains to be seen, the probability of textile enterprises to open remains high, cotton consumption continues, short-term or support cotton prices rebound. Overall, supply and demand continue to game, cotton prices in the second quarter or wide fluctuations, the bottom center of gravity has risen.
(Information source: China Cotton Network, China Storage Cotton Information Center)
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