1, The average domestic cotton price is lower than last week
The nationwide cotton picking has basically ended, and the processing is entering the later stage. The pressure on cotton supply continues to increase. The textile market continues to be sluggish, with declining production enthusiasm and weak willingness to replenish inventory. The domestic cotton futures and spot prices have rebounded slightly after experiencing consecutive declines in the previous period, and the average price is still lower than last week. The average settlement price of the main contract of Zhengzhou cotton futures is 14795 yuan/ton, a decrease of 382 yuan/ton from the previous week, a decrease of 2.5%; The national cotton price B index, which represents the market price of standard grade cotton in mainland China, has an average price of 16355 yuan/ton, a decrease of 279 yuan/ton from the previous week, a decrease of 1.7%.
2, International cotton prices fluctuate and fall
The listing of cotton in the northern hemisphere is accelerating, with clear yields and significant short-term supply pressure. According to data from the US Department of Agriculture, the number of US cotton contracts significantly decreased last week, and market demand remained sluggish, causing international cotton prices to fluctuate and fall. From November 27th to December 1st, the average settlement price of the main cotton futures contract in New York was 79.39 cents per pound, a decrease of 1.42 cents per pound or 1.8% compared to the previous week; The international cotton index (M) representing the average landed price of imported cotton in China's main port is 89.92 cents per pound, a decrease of 1.14 cents per pound or 1.3% compared to the previous week; The import cost in RMB is 15667 yuan/ton (calculated based on 1% tariff, excluding port charges and freight), a decrease of 200 yuan/ton compared to the previous week, a decrease of 1.3%. The domestic cotton price is 689 yuan/ton higher than the international cotton price, and the price difference has narrowed by 78 yuan/ton compared to the previous week.
3, Domestic cotton yarn prices have stabilized from a decline, while international cotton yarn prices have slightly declined
The domestic textile market will perform poorly in spring next year, with large and medium-sized cotton yarn traders increasing their efforts to sell low count yarns. After the rebound in domestic cotton prices, cotton yarn prices have stabilized. Affected by the continued bleak overseas consumption, the demand for outer yarn in the market is weak, and prices have slightly declined. The domestic grey fabric market has weak sales, and cotton fabric prices have weakened. The price of polyester staple fibers has expanded with the decline in raw material PTA prices.
4, Future prospects
The global economic outlook is still downward, and international cotton prices may continue to be weak.
The latest report from the Organization for Economic Cooperation and Development states that the global economic outlook is facing downward risks in the near future, and has lowered the global economic growth forecast for 2023 from 3.0% to 2.9%. The Federal Reserve's economic outlook survey report shows that in the six weeks ending November 7th, overall economic activity in the United States has shown a slowing trend, with consumers becoming more price sensitive and spending on non essential and durable goods decreasing. In terms of the cotton market, the picking progress of cotton in the northern hemisphere has accelerated. According to a report from the US Department of Agriculture, as of November 26th, the picking progress of cotton in the US was 83%, unchanged year-on-year and an increase of 4 percentage points from the average of the past five years. As of the week ending November 26th, the market volume of new cotton in India was 162400 tons, a significant increase from the previous week. The international textile market continues to be sluggish, and the Vietnam Cotton Spinning Association predicts that textile exports will decrease by about 10% this year. Overall, there is a large global supply of cotton, and the pattern of phased supply exceeding demand is prominent. International cotton prices are expected to operate weakly.
The off-season atmosphere in the textile market is prominent, and domestic cotton prices are under pressure.
According to data from the National Bureau of Statistics, the Purchasing Managers Index and Comprehensive PMI Output Index of the manufacturing industry in November were 49.4% and 50.4%, respectively, with a month on month decrease of 0.1% and 0.3%, indicating a slight decline in the prosperity level of the manufacturing industry. In the domestic cotton market, with the decline in cotton prices, the willingness of cotton processing enterprises to quote and ship has significantly decreased. According to the National Cotton Market Monitoring System, as of November 30th, the national new cotton processing rate was 67.8%, a year-on-year increase of 19.3 percentage points, and the sales rate was 6.7%, a year-on-year decrease of 1.4 percentage points. In the textile market, the speed of yarn circulation has significantly slowed down, and the inventory of finished products in textile enterprises is on the rise. Some textile enterprises have further lowered their operating rates. Overall, there is sufficient cotton supply in the short term, and downstream textile market demand continues to weaken. It is expected that domestic cotton prices will continue to be under pressure.
