National Cotton Keeps Bidding For Stable Domestic Cotton Prices

National cotton reserves go smoothly, domestic cotton prices run smoothly

Since mid May, although the price of cotton in the international market has increased and suppressed, the fluctuation of domestic cotton prices has been relatively large. However, the cotton price in domestic spot is running smoothly. What are the reasons?

"National cotton auction has been going on for more than 1 months, but the auction rate and paction price remain at a high level, especially when the turnover rate is close to 100%."

Xu Zhengjun, manager of Tongzhou cotton business in Henan, said that at this time last year, he visited downstream cotton enterprises, and found that many enterprises had limited production, stopped production and went bankrupt.

Now, when he again finds out the situation of downstream cotton enterprises, many enterprises tell him that it is difficult to purchase suitable.

More orders and less raw materials make enterprises earn less money.

Shanghai Hua Fu Textile Co., Ltd. deputy general manager, Shan Hua said that the current textile enterprises raw materials inventory is generally inadequate, due to the processing profit is good, product orders queuing, especially domestic orders growth trend is obvious, textile enterprises procurement demand is still rising, but the amount of spot cotton available in the domestic market is too small, demand enterprises rely mainly on procurement.

To meet production needs.

It is understood that despite the recent volume of national cotton storage is less than market expectations, but continuous auction and storage of state cotton, or let the market dispel the supply disruption concerns.

More importantly, the tight supply pattern has been improved, and the probability of a sharp rise in cotton prices is getting smaller.

At the same time, due to the strong demand of the market, the imported cotton in the early stage also began to sell well, among which the market demand for Australian cotton was increasing.

From the analysis of the overall situation of the auction and outgoing of the national cotton store, the state store cotton went out of stock more smoothly, which weakened the market's worry that the huge inventory would suppress cotton prices for a long time, and made the domestic cotton prices in the situation of stronger demand, neither sustained sharp rise nor continuous decline, the price was always in the more recognized regions of the main market.

Xu Zhengjun said that the current textile enterprises purchase national cotton stores are more active.

Besides national storage cotton is the main supply channel, at the current price, the purchase of national storage cotton, especially the domestic cotton inventory, is also cost-effective.

Many cotton enterprises use part of the national cotton reserves in production, and then mix some imported cotton with better quality.

It can produce qualified products.

It is understood that with a part of national cotton processing cotton yarn, textile enterprises profit conservative estimate also has 500 yuan / ton.

During the interview with some cotton traders, we found that because of the steady demand for downstream cotton, the decline in the number of imported yarns and the good sales of cotton products, traders were optimistic about the cotton price in the late stage.

However, from the point of view of textile enterprises, the processing profit of enterprises has not returned to normal level, because the national cotton stored in the early stage is going to flow into the terminal consumer market in large quantities, and the later cotton price presents a greater probability of small wave dynamic potential.