After The Year, The Cotton Market Rose Sharply, Opening A Good Start For 2021

According to statistics, as of February 22, the average price of domestic lint spot market was 16241 yuan / ton, up 4.12% in five days. Compared with 13504 yuan / ton in 2020, it increased by 20.27% year on year. The recent rapid price rise is due to the improvement of macro market atmosphere, the expected recovery of economic stimulus after the control of the epidemic situation in the United States, the rise of American cotton price and the promotion of downstream demand. US cotton prices continued to rise due to the positive supply and demand report in February, US cotton export sales remained strong and global cotton demand recovered. On the other hand, textile enterprises started work earlier this year, and after the Spring Festival another round of replenishment, order demand has accelerated. At the same time, the domestic market polyester staple fiber, nylon, spandex and many other textile raw materials prices rise, for the rise of cotton prices play a catalytic effect.

Internationally, the U.S. cotton production in 2020 / 21 will be significantly reduced. According to the latest USDA report, the U.S. cotton production this year will decrease by nearly 1.08 million tons to 3.256 million tons compared with the previous year. In 2021 / 22, USDA Outlook Forum significantly increased global cotton consumption and total output, and at the same time significantly reduced the global cotton final inventory, among which cotton demand of China, India and other textile powers was increased again. The U.S. Department of agriculture will release its official cotton planting area on March 31. Brazil's cotton planting progress is backward, and the yield forecast is down. India's cotton production is expected to be 28.5 million bales, with a year-on-year decrease of 500000 bales; China's output is 27.5 million bales, with a year-on-year decrease of 1.5 million bales; Pakistan's output is 5.8 million bales, with a year-on-year increase of 1.3 million bales; and that of West Africa is 5.3 million bales, with a year-on-year increase of.

In terms of futures, ice cotton futures rose to the highest level in more than two and a half years, and speculation continued to be triggered by factors such as sustained demand for good, land competition between grain and cotton, and optimism in the peripheral market. On February 23, the opening price of 2105 main contract of Zheng cotton was 16325 yuan / ton, and the settlement price was 16405 yuan / ton, reaching a high point of 16500 yuan / ton. The domestic cotton market is in the stage of gradual recovery, and the enthusiasm of the downstream suppliers is not high. The main reason is that the quoted price of cotton resources has increased significantly and the yarn enterprises have their own pre holiday reserve sources available. It is expected that the market transaction will gradually return to normal after the Lantern Festival. In the 13th week of 2021 (from February 22 to February 26), the maximum price of Xinjiang cotton will be 16254 yuan / ton (equivalent to standard grade 3128b), which is 414 yuan / ton higher than last week. (data source: national cotton market monitoring system, China Cotton network)

Downstream: since the middle of February, the growth rate of cotton yarn in Jiangsu, Henan and Shandong has been concentrated at 500-1000 yuan / ton, and the increase of high count combed and combed cotton yarn of 50s and above has generally reached 1000-1300 yuan / ton. At present, the resumption rate of domestic cotton textile mills, fabric and garment enterprises has recovered to 80-90%, and a few yarn mills have begun to inquire and purchase cotton, polyester staple fiber and other raw materials. With the arrival of domestic and foreign trade orders from March to April, there are still some contracts to catch up with before the festival. Under the support of peripheral markets and fundamentals, ice and Zhengzhou cotton have formed resonance, while downstream weaving, fabric enterprises and clothing factories are expected to purchase from the end of February to the first ten days of March. In view of the sharp rise in cotton yarn and polyester cotton yarn quotation, textile and garment enterprises need to speed up the pressure of cost growth to the downstream terminals.

Analysts believe that under the background of multiple positive, domestic cotton prices have been rising. With the coming of the peak season of gold, silver and four in the domestic textile industry, the market is generally optimistic about the future market, but it is also necessary to be aware of the impact of the new crown and the pressure brought by the market enthusiasm to cool down.