China Cotton network news: According to the feedback of some cotton processing enterprises in Shihezi, Kuytun, Aksu and other places, with the recent Zheng cotton CF2405 contract continuing to store power near the 15,500 yuan/ton mark, the volatility of the plate has been reduced, coupled with the consumption terminals such as cotton yarn and grey cloth continuing to improve (especially the production and sales of high-counting combed yarn in the 40S to 60S are flourishing). Cotton mills and traders’ inventories fell to a reasonable level or relatively low), so some cotton traders, futures companies once again opened a larger inquiry/procurement rhythm.

From the current point of view, ginners are more willing to accept the first lock base difference after the point price model, and for the price, basis trading is relatively cautious. On the whole, in 2023/24, Xinjiang cotton resources are speeding up the flow to the intermediate link and “reservoir”, and traders have gradually become the main body of commercial cotton circulation resources.

From the survey point of view, Henan, Jiangsu, Shandong and other mainland large and medium-sized cotton textile enterprises cotton and other raw materials replenishment work has come to an end, it is difficult to have a big move before and after the Spring Festival, the support for the cotton market weakened. On the one hand, up to now, many cotton textile companies have only received orders before mid-February (a few companies have ordered to the 15th day of the first month), and there are uncertainties in the situation of receiving orders, contract prices and profit margins in the later period. On the other hand, driven by the expiry of the sliding tariff quota at the end of February and the issuance of the 1% tariff cotton import quota in 2024, most of the textile enterprises above the scale pay close attention to the procurement of bonded, spot foreign cotton or far month cargo, and the delivery volume is expected to be higher in the first half of 2024.

Since mid-December, the signs of 2023/24 Xinjiang cotton resources differentiation are becoming more and more obvious, 3128B/3129B (breaking specific strength 28CN/TEX and above) high-grade high-quality index cotton quotes continue to be strong, while the futures discount is high or does not meet the conditions of warehouse receipt registration of Xinjiang cotton batch quotes are stable and falling. Cotton processing enterprises pay close attention to the price reduction of shipments, and strive to achieve 50% or even more than 60% clearance before the Spring Festival. According to industry analysis, the continued strength of Xinjiang cotton quotation with high indicators and high spinnability is mainly driven by the smooth delivery of C40-C60S cotton yarn, the return of Zheng cotton main CF2405 contract to the 15500-16000 yuan/ton range and the significant slowdown of capital flow pressure after large area of cotton mill yarn inventory.

Source: China Cotton Information Center