Xinjiang: Lint Sales Rebounded In August

Since August, the main contract of Zheng cotton has continued to fall, and the selling price of domestic bases has also been reduced by 1000-1200 yuan / ton, and the losses of some cotton enterprises which are not covered by the guarantee or the low proportion of hedging have continued to expand, and the market pessimism has spread. Part of the low inventory, cash flow pressure of cotton enterprises to rush to ship clearance, and some large and medium-sized cotton traders to join the ranks of the lower price shipments. Some agencies, textile enterprises said that unlike the 4-5 month slow down the pace of spot, August spot down significantly faster and larger.

Part of the regulatory database reflects that lint is out of the territory, especially in the context of high freight rates, falling cotton prices, sluggish consumption and new cotton in the 2019/20 cotton industry (including cotton wool).

However, the author thinks that the sales progress of Xinjiang cotton in August was obviously accelerated (the proportion of uncontracted delivery increased), which is reflected in the following three points: first, the sales of corps cotton have been greatly increased. It is understood that in August several large and medium-sized cotton textile factories, traders and corps to negotiate the purchase of lint in 2018/19, and the Corps also followed Zheng cotton to substantially adjust the cotton quotes, and the payment of goods, delivery place and more flexible, soldiers cotton to accelerate shipment.

The two is that the base of Xinjiang cotton and the number of deliveries are relatively large. Affected by the CF1909 contract price below 12000 yuan / ton integer entry point, the advantage of warehouse receipt price performance is obvious, and the enthusiasm of cotton enterprises directly receiving warehouse receipts is increasing. Three, the attraction of hand picking cotton and machine cotton picking in some Southern cotton ginning plants is continuously increasing. Limited by the cost of takeover, lint quality and transport conditions, before July, the southern Jiangsu ginning factory had "slow shipping, high capital pressure and high sentiment", but with the Sino US trade war escalating and the market situation gradually becoming clear, it meant that cotton enterprises were willing to win or lose.