Cotton Sales Progress To Accelerate Spot Down Mentality Eased

Since the beginning of this year, the downstream purchasing of cotton has not been prosperous, and the sales data are poor.

But recently launched in the country.

Under the stimulation of the sales quota policy, sales progress has obviously accelerated, domestic cotton prices have stabilized gradually, the market mentality has improved, and some external stimulus factors are expected to drive the price rise steadily.

Cotton sales progressively accelerate

In the early part of this year, sales of new cotton were dismal, and sales data decreased significantly.

According to the national cotton market monitoring system, as of October 31, 2014, the sale of new cotton was only 304 thousand tons, down 886 thousand tons compared with the same period last year, which is 875 thousand tons less than that in the past four years.

There are two reasons for the poor sales data.

First, cotton prices fell all the way this year, and businesses did not dare to hoard cotton stocks. Raw material stocks generally remained in cotton for 15 to 30 days.

Two, the new flower listing this year has been delayed for more than half a month compared with the previous years, and has also resulted in a smaller sales volume than in previous years.

Due to the poor sales data, the state intends to promote sales by Xinjiang cotton selling tying quota, which has played a more obvious effect, especially in the two weeks before New Year's day, the total sales volume reached 600 thousand tons.

At the same time, the normal replenishment of textile enterprises has played a certain role in improving sales volume.

In addition, under the pressure of financial pressure, the sale of ginning plants has attracted a large number of textile enterprises and traders.

According to the national cotton market monitoring system, as of December 31, 2014, the total sales of lint 2 million 20 thousand tons, which means that in November and December two months, a total of 1 million 700 thousand tons of cotton sales.

The rational analysis of the data embodies two aspects.

First, textile enterprises have made certain purchases in advance because of the demand for import quotas.

It does not reflect actual demand.

The two is to reflect the increment of normal business demand. This year, domestic textile enterprises are facing many favorable information, and the demand is also improved.

The mentality of the spot market is gradually relieved

With the increase of sales, the cotton mill also recovered part of the funds, and the pressure of the funds was relatively reduced.

Therefore, the mentality of the spot market has gradually stabilized, and spot prices no longer continue to fall.

Downstream, as cotton prices continue downward, yarn prices also remain weak, but there are two obvious characteristics.

First, the decline in yarn prices is slowing down.

Combing 40S yarn, for example, dropped 350 yuan / ton in December last year, down 710 yuan / ton in November and 1160 yuan per ton in October.

Two, the price decline of cotton yarn is smaller than cotton price.

Combing 40S since September 2014

Prices fell 2900 yuan / ton, or 10%, while cotton prices fell to 3400 yuan / ton during the same period, or 20%.

Therefore, the increase in yarn profits of textile enterprises helps to improve the business form of enterprises. However, because the increment of demand has not yet appeared for a while, the stimulation to cotton is not yet reflected.

Due to the narrowing of the spot price at home and abroad and the narrowing of cotton yarn spreads, the number of imported cotton and cotton yarns has decreased significantly, which will increase domestic cotton consumption accordingly.

To sum up, the current sales situation has obviously improved, and the pessimistic mentality of the market caused by financial pressure has gradually resumed, and the possibility of further down the price of cotton is very small.

With the easing of monetary policy, the depreciation of the renminbi, the narrowing of the domestic and foreign cotton prices, and the changes in the export tax rebate policy, the cotton consumption in the future will be further enhanced, thus pushing up the domestic cotton prices.