Can the bottom price of cotton reserves become the bottom price of the market?
Recently, the domestic cotton textile industry has been extremely busy. The rotation of cotton reserves is in full swing, and downstream companies are also actively participating in bidding. Moreover, the transaction price of reserve cotton has also risen, even exceeding the expectations of some bidding companies. As far as we know, 2017The lowest round-out price in the first week of the year is15358yuan/tons (standard price),2016The lowest round price in the first week of the year is only12021.4Yuan/ton, a year-on-year increase3337 yuan/ton, the focus of cotton prices is obvious Move up.
The rise in cotton prices in 2016 is inseparable from the following conditions: First, domestic industrial and commercial inventories are low, and textile companies are eager to feed their cotton reserves and wait for their turn to replenish their inventories. In addition, the delay in the rotation time has aggravated the inventory tension of textile enterprises. Secondly, due to the sluggish market conditions, cotton prices have continued to fall, cotton farmers’ willingness to plant cotton has declined, and the planting area has decreased, resulting in a year-on-year decrease in new cotton production in 2015, with the mainland’s production falling more than Xinjiang. Again, 2016 was the first time that large-scale cotton reserves were rotated out. Some problems were encountered in cotton public inspection and other aspects, which resulted in the daily listing volume being unable to guarantee 30,000 tons. This had a great impact on market bidding sentiment and also contributed to the cotton price increase to a certain extent. Prices rose sharply.
Looking at the market and rotation environment this year, there have been some changes from last year, so can this year’s rotation bottom price become the bottom price? In 2017, cotton reserves were rotated out as planned, two months earlier than in 2016, so the total supply during the rotation was higher than last year. Moreover, the daily listing volume currently remains at around 30,000 tons, which also provides great support for stabilizing market sentiment. In order to ensure this year’s rotation volume, the storage warehouse had arranged in advance for public inspection of the reserve cotton planned to be rotated out this year as early as last year, so the rotation volume was guaranteed. When the overall supply is relatively loose, it is difficult for market prices to continue to rise or fall sharply. Of course, there are also some uncertainties, and rising prices are not impossible. Changes in the public inspection, delivery, transaction and related policies of cotton reserves in the later period are worthy of attention. After all, these factors may affect the direction of cotton prices.
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