After New Year’s Day, the cotton market in Shandong, Hebei and other places in the Yellow River Basin has little fluctuation. The upstream and downstream sectors maintain the situation before the New Year’s Day holiday, but the game between all parties has obviously intensified.
Cotton farmers’ reluctance to sell continues to increase. Zheng cotton rose sharply. On December 30, the main CF2005 contract successfully exceeded the 14,000 yuan/ton mark, and the market had a strong bullish atmosphere. On January 2, 2020, a cotton farmer in Dezhou, Shandong Province introduced that the current mainstream price of seed cotton is 3.15-3.25 yuan/jin (40% clothing content, 10% moisture regain), which has not changed much compared with December 31, 2019, but everyone It is expected that seed cotton can be sold for about 3.30 yuan/jin, especially since large cotton farmers have more cotton in stock, and they hope that seed cotton can increase in price. According to reports, the yield of seed cotton per unit area in the Yellow River Basin has declined this year. In order to make up for the loss, most cotton farmers hope that the price of seed cotton can be higher.
Each cotton ginnery has other plans. On January 2, the person in charge of a ginnery in Dongguang, Hebei Province said that at present, everyone is still buying seed cotton at a low price, mainly considering three aspects: First, the Spring Festival is approaching, and the quality of seed cotton in the hands of cotton farmers continues to decline, and mixed-grade cotton and stiff-flap cotton are successively sold. Entering the market has made cotton companies extremely defensive; secondly, the spot price of downstream lint cotton is far from keeping up with the rising pace of Zheng cotton. The current spot delivery prices of grade 3128 and grade 4128 lint cotton in Cangzhou, Hengshui and other places in Hebei are respectively 13,300-13,500 yuan/ton (gross weight, including tax), 13,000-13,100 yuan/ton (same as above), which has not changed much compared with December 31, 2019; third, downstream yarn mills and middlemen have more telephone inquiries but less physical inspections of goods, and fewer actual purchases. The situation of unsalable spot lint cotton has not been significantly improved.
In addition, the battle between ginning mills, middlemen and textile mills is still going on. On January 2, the person in charge of a ginnery factory in Dezhou, Shandong Province made a calculation: The current gross profit from processing one ton of lint cotton is 300-400 yuan. If the spot price of lint cotton maintains the status quo, the profit of the ginnery factory cannot be guaranteed. Recently, mainstream yarn mills in the Yellow River Basin are about to go on holiday and are cautious about purchasing raw materials. The person in charge of the purchasing department of many textile mills said that although yarn and gray fabrics have increased slightly recently, the sales volume has not improved significantly, and they dare not stock up in large quantities. Therefore, many spinning mills have the following attitudes towards lint cotton: First, they insist on asking for prices and grasp the market situation, but take timely measures if there is any trouble; second, large factories still purchase Xinjiang cotton by “pointing prices”, especially machine-picked cotton, and small factories Most of the goods are obtained from traders and middlemen, mainly imported cotton and Xinjiang cotton.
To sum up, various links in the cotton industry chain are still competing recently, and the market conditions are undercurrent. It is expected that the domestic cotton market will become more volatile around the Spring Festival. The industry must stay clear-headed, well-informed, and be prepared. </p
