Lido Frequent Price Increases, The Basic Pressure Is Still To Be Released.

Recently, the domestic cotton market has changed to a bad situation in the early days. Frequent profits and frequent news have led to various degrees of rebounding. As of Friday's close, the main 2001 contract has risen to 12925 yuan / ton, a trading limit has been in the market. The contract fell to 12240 yuan / ton at the end of August when the Sino US economic and trade frictions escalated again. On the same day, under the vigorous impetus of Zheng cotton, the turnover rate of cotton reserves was 100%, the one hundred percent time since July 8th.

Temporary easing of Sino US economic and trade frictions

In late August, Sino US economic and trade frictions escalated again. The United States said it would impose tariffs on imports of goods from China, about $550 billion. Among them, the $250 billion commodity that has been added to the tariff will increase the tax rate by 5 percentage points to 30%, and the remaining plan will increase the tax rate by 5 percentage points to 15% by adding 300 billion dollars to the duty. As mentioned above, if the measure is implemented, the United States will impose high tariffs on all goods imported from China, including all textile and clothing. Affected by this, the price of domestic cotton fell to a new height. In recent months, the 09 contract fell below 12000 yuan / ton, a large discount on spot, and the lowest 2001 contract reached 12240 yuan / ton, which set a new low of three years. But from the price point of view, cotton is obviously oversold.

On the morning of September 5th, the two sides took the lead in the Sino US economic and trade consultations. The two sides agreed to hold the thirteenth round of high-level Sino US economic and trade consultations in Washington at the beginning of October. On Thursday afternoon, the Commerce Ministry spokesman said the summit made substantial progress in the thirteenth round of Sino US economic and trade consultations held in early October. This undoubtedly brought a good rebound opportunity for domestic oversold cotton. Affected by this, domestic cotton Thursday obvious rebound behavior, the main 2001 contract began to fill the gap gap in August 26th.

Policy window period approaching

According to the announcement of the Ministry of finance of People's Republic of China on 2019 first, according to the actual output of cotton reserves and the supply and demand of the cotton market, the relevant departments of the state have arranged for the rotation. Unlike the previous inventory, this year, after the rotation of the reserve cotton, it is necessary to take turns to replenish the stock to a safe level. The total planned output of 1 million tons, as of Friday, has actually clinch a deal of 826 thousand and 100 tons of 10000 tons, the cumulative turnover rate of up to 84.67%. We expect that by the end of September, the planned output of 1 million tons will basically be achieved. It is reported that the current round of entry will be equivalent to the volume of rotation, and we believe for the time being that the amount of cotton reserves is 1 million tons.

At this stage, domestic resources supply is quite adequate, and new cotton is about to go on sale. In this regard, the recent market speculation, the formation of an invisible impetus to cotton prices, although there is no specific policy on the exact message.

Downstream construction slightly improved

Although the characteristics of this year's peak season are not obvious, the arrival of Jin Yin Yin ten brings a hint of warmth to the downstream. Compared with August, the downstream orders slightly improved, and the operating rate picked up slightly. According to the relevant data, since the end of August, the domestic downstream yarn and grey fabric start rate began to slow up and rebound, both stocks are also declining, in a slow phase. Compared with the same period last week, yarn and grey fabric operating rates increased by 0.2 and 0.5 percentage points respectively, and their inventories both decreased by 0.2 days.

At the same time, domestic lint spot sales progress slightly accelerated last week. According to the national cotton market monitoring system survey data, as of August 30th, the national lint sales rate was 83.9%, down 11.8 percentage points from the same period last year, the decline was 0.4 percentage points lower than last week, compared with the past four years, the average reduction of 12.5 percentage points, the decline was 0.2 percentage points lower than last week.

Fundamental pressure remains to be further released.

Since September last year, domestic cotton business inventories have been increasing substantially year by year. According to the survey data of China Cotton Association logistics branch, the total cotton business inventory in the end of July was about 2 million 888 thousand and 100 tons, a decrease of 450 thousand tons from the previous month, an increase of 890 thousand tons compared with the same period last year, maintaining a record high for nearly five years. At the same time, domestic cotton sales progress was significantly lagged behind the same period in previous years. As of August 30th, the national cotton sales rate was 83.9%, down 11.8 percentage points compared with the same period last year, and 12.5 percentage points lower than the past four years. Among them, the sales rate in Xinjiang is only 82.5%, which is 16 percentage points lower than that in the same period last year. As of August 30th, 1 million tons of lint had not been sold throughout the country. In the same period last year, only 300 thousand tons of lint were not sold.

As the pace of new flower coming is approaching, the output of new flowers gradually becomes clear. Cotton growth is good in Xinjiang area. Although the temperature is low in the early stage, with the continuous increase of temperature, the impact on yield is not great, or the time of new flower listing will be delayed.

Domestic cotton business inventories have been in the same period for nearly five years.

The sale of new flowers is far behind the same period in previous years.

Although the domestic market has improved, the production and marketing are still hard to keep flat and the price is more frequent. The order is slower than the same period last year, and the overall inventory clearance is still slow. Compared with the same period last year, domestic yarn and grey fabric operating rates fell 12.6 and 6.6 percentage points year-on-year respectively, and their inventories rose by 11.8 days and 4.6 days respectively.

Downstream operating rate fell during the same period

The new cotton market has been sporadically listed in China, and the mentality of the parties is relatively strong. The market expects that the price of the new flower will be less than 5 yuan / kg, much lower than the same period in the past two years. The weak demand for the downstream has improved and superimposed many factors such as Sino US trade consultation, storage and rumor and so on. Zheng cotton prices have rebounded strongly. However, the fundamentals of cotton in China have not changed much, and they are still in a weak state of contradiction between supply and demand. At present, the weather is still a key factor affecting the output of new cotton.