Sino US Trade Friction Boosted Cotton Auction

In May this year, during the continuous fermentation of Sino US trade frictions, the price of domestic cotton futures was severely weakened, and the price range was repositioned. Despite recent positive signals from Sino US consultations, the price rebound was weak and the downward pressure intensified. If the negotiations between the two sides failed to make progress in the next three days, the deep down space was expected to be opened.

At present, the whole cotton spinning industry chain in China is under unprecedented pressure. The price of raw materials is falling, factories are closing down, and products are continuing to backlog. The industry shuffle is inevitable. Especially in September, when new cotton was picked up in succession, Chen cotton still had a large backlog of stocks, and the price of later generations was not very optimistic.

It is against this background that the hot degree of cotton auction is in sharp contrast to the cold sales situation of commercial cotton. A trader directly pointed out that 8-10 months textile enterprises mainly engaged in domestic sales, domestic sales customers generally did not have high quality requirements, and they could sell out as long as the price was right. It can be seen that Sino US trade problems have significantly reduced export orders, and the demand for high-grade cotton has declined, but there is not much problem in domestic sales. In addition, the middle link cotton yarn is not as bleak as it is claimed, 40S and above are slow in combing and carding, and the yarn in low and medium low cotton can be carried, and the stock is mainly high count yarn.

Of course, apart from the issue of Sino US trade, the reserve price of cotton has become competitive. According to the results of today's auction, the average price of real estate cotton is 12319 yuan / ton, and the average price of Xinjiang cotton is 12775 yuan / ton. At present, the spot price of the market is generally over 14000 yuan / ton, and the advantage of the reserve cotton wheel is obvious, even though compared with the CF1909 contract, there are several hundred yuan price advantages per ton. Cotton prices are the kingly way in the face of sluggish market buying and failure. According to the current market situation, cotton is expected to be favored by buyers.