This week, domestic cotton prices fell back, and international cotton prices weakened marginally; domestic and foreign cotton yarn prices fell; polyester staple fiber prices continued their decline.
1. Domestic cotton prices fall
It is still difficult to sell high-priced new cotton this week. Processing companies have begun to sell at reduced prices, and downstream textile companies have accumulated finished product inventories. Production and operation pressure has increased, and domestic cotton prices have fluctuated and fallen. From November 22 to 26, 2021, the national cotton price B index, which represents the market price of standard grade lint cotton in the mainland, averaged 20,910 yuan/ton, a decrease of 144 yuan/ton or 0.7% from the previous week; the main cotton futures contract of Zhengzhou Commodity Exchange The average settlement price was 21,594 yuan/ton, down 123 yuan/ton or 0.6% from the previous week; the Chinese cotton purchase price S index, which represents the average price of white cotton grade 3 seed cotton and lint cotton in the country’s main cotton-producing provinces (regions), was 20,390 yuan/ton. tons, an increase of 140 yuan/ton, or 0.7%, from the previous week.
2. International cotton prices weakened, with the average price slightly higher than last week’s level
This week, market trading was light around Thanksgiving, weak demand in the Indian and Pakistani textile markets, and a strong U.S. dollar index also put pressure on the market. International cotton prices weakened, with the average price slightly higher than last week’s level. From November 22 to 26, 2021, the average settlement price of the main contract of the U.S. Intercontinental Exchange Cotton Futures (ICE) was 115.8 cents/pound, an increase of 0.15 cents/pound or 0.1% from the previous week; representing the main port of imported cotton in China The average price of the international cotton index (M) at the CIF price is 132.2 cents/pound, up 0.7 cents/pound or 0.5% from the previous week, and the import cost in RMB is 21,096 yuan/ton (calculated based on 1% tariff, including Hong Kong miscellaneous and freight), an increase of 114 yuan/ton, or 0.5%, from the previous week. The international cotton price is 144 yuan/ton higher than the domestic cotton price.
3. Active transactions in reserve cotton
This week, reserve cotton transactions continued to be active, with all Xinjiang cotton and imported cotton transactions. From November 22 to 26, 2021, the average transaction price of reserve cotton was 20,206 yuan/ton, an increase of 319 yuan/ton, or 1.6% from the previous week; among which, the average transaction price of Xinjiang cotton was 22,498 yuan/ton, a decrease of 439 yuan/ton from the previous week. yuan/ton, a decrease of 1.9%; the average transaction price of real estate cotton was 18,494 yuan/ton, an increase of 244 yuan/ton, or 1.3% from the previous week; the average transaction price of imported cotton was 22,471 yuan/ton, a decrease of 650 yuan/ton from the previous week. An increase of 2.8%.
4. Cotton yarn prices at home and abroad fell
This week, the textile market continues to face a shortage of orders. The increase in yarn inventory has become more obvious. Some small yarn mills have begun to sell goods at low prices. The withdrawal of funds has alleviated the pressure. Domestic cotton yarn prices continue to fall. Due to insufficient demand from downstream enterprises, the price inquiry and transaction performance of cotton yarns from India and Pakistan was deserted. Indian yarn quotations led the decline in foreign yarns, but the average international cotton yarn price was still 732 yuan/ton higher than conventional domestic yarn. New orders from weaving companies are still mainly in small batches, gray fabric inventories continue to accumulate, market sales competition is fierce, and pure cotton fabric prices have fallen. The price of polyester staple fiber fluctuated and fell with the PTA.
5. Market Outlook
New mutant strains have emerged, making it difficult to sustain orders in the textile market. The recent sudden surge in new coronavirus infections in Europe threatens economic recovery. A new variant of the new coronavirus was discovered in South Africa. Many countries have stepped up their defenses, and the market is panicking again. In the international cotton market, the US Department of Agriculture reported that as of November 21, 2021, the US cotton harvest progress was 75%, an increase of 10% from the previous week. Data from the Cotton Association of India shows that the volume of new cotton in India in October was 530,000 tons, a year-on-year increase of 15%. Pakistan’s new cotton harvest has been completed, and the processing volume is significantly higher than the previous year’s level. Sufficient water storage in Australia’s production areas has boosted expectations for total cotton output. The country’s Cotton Shipping Association said the entire industry chain is preparing for the possible arrival of the largest volume in history. In the international textile market, as the epidemic in Southeast Asian countries slows down, operating rates in many places have increased. However, they still face problems such as labor shortages and delivery delays. Weak terminal consumption and high cotton yarn prices have suppressed downstream demand, and the Southeast Asian cotton yarn market continues to be deserted. According to the 2021 Global Lifestyle Monitor survey, 68% of consumers expect to purchase less clothing than before the epidemic. In the short term, overseas epidemics have repeatedly worried the market, and the international cotton market will weaken marginally due to the influence of the consumer side.
New cotton showed signs of price reduction, and textile companies sold cotton yarn. The Ministry of Commerce stated that my country’s foreign trade micro-enterprise entities mainly face six major difficulties, among which there are many trade risks, rising costs, many supply chain congestion points, and few orders. In the domestic cotton market, the harvest of seed cotton has basically ended, the processing of new cotton has accelerated, and sales have been sluggish. According to data from the National Cotton Market Monitoring System, as of the week of November 26, 2021, 453,000 tons of lint cotton were processed nationwide, a month-on-month decrease of 10.3%, and 129,000 tons of lint cotton were sold, a month-on-month decrease of 7.9%. High-cost new cotton is facing a sales bottleneck. The quantity of cotton shipped by road in Xinjiang is significantly lower than the same period last year, and new cotton is showing signs of price reduction. In the short term, downstream textile companies mainly purchase raw materials through auctions and reserve cotton, and use quotas to purchase consignment cotton at ports. Ship cargo purchases are also very small. Under the dual pressures of weakening consumption in the end-use clothing and gray fabric markets and high raw material costs, textile companies are finding it difficult to maintain orders and operating pressures are intensifying. Some downstream companies have gradually begun to reduce production, reduce prices, and remove inventories to ease the tight capital flow situation. On November 22, La Chapelle, one of the domestic clothing giants, filed for bankruptcy. In the short term, the textile industry has gradually entered the off-season, companies have maintained low profits, and the domestic cotton market continues to be under pressure.
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