That week (January 10-14, 2022), the domestic epidemic continued to spread, and new confirmed cases continued to be reported in many places. However, the severe epidemic prevention and control situation failed to prevent Zheng Cotton from hitting a new stage high. Especially as the new year is approaching, the industry In the off-season of demand, Zheng Cotton’s main contract has continued to rise to around 21,500 yuan/ton.
That week, the spot price of cotton was stable at around 23,000 yuan/ton. Upstream raw material companies sold at high prices, which were beyond the tolerance of downstream customers, causing sales progress to lag far behind the same period in previous years. According to a survey by the National Cotton Market Monitoring System, based on the estimated domestic cotton output of 5.801 million tons, as of January 13, the country’s cumulative sales of lint cotton were 1.432 million tons, a year-on-year decrease of 1.607 million tons, and a decrease of 1.043 million tons from the average of the past four years. Among them, Xinjiang Cotton sales were 1.218 million tons. According to the current sales price of cotton yarn, the purchase of new cotton spinning yarn is basically facing a loss, which is one of the main reasons for the significant reduction in purchases by textile companies.
As the Spring Festival holiday approaches, downstream companies are arranging holidays, reducing orders and raw material purchases. In areas with severe epidemics, corporate production and sales have been subject to certain restrictions. First, the transportation time of raw materials to the factory is extended, delaying the normal start-up of the company; second, production The overseas transportation of cotton yarn has also been restricted by epidemic prevention and control, which has affected the normal start-up and operation of enterprises in the short term. Enterprises’ raw material inventories and cotton yarn inventories remain at low levels, but raw material prices are firm, causing cotton prices to continue to fluctuate at high levels.
That week, the biggest driving force for the increase in cotton prices was driven by the prices of foreign cotton and foreign yarn. The US USDA January supply and demand report reduced US cotton production and ending stocks, and overnight ICE cotton futures rose by more than 1%. At the same time, cotton and cotton yarn prices in India and Pakistan continue to rise, with Indian cotton yarns of various counts generally rising by 1.2-2%, and Pakistan’s 30-count yarn rising by 2.18%. The price of outer yarn continues to rise, causing the price of inner and outer yarn to drop to more than 2,000 yuan/ton, which greatly enhances the competition and export advantages of domestic yarn and its products, and stimulates domestic cotton consumption.
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