Where Is The Reason Why Cotton Reserves Are Hard To Cool Down?

As of May 27th, the cumulative turnover of cotton reserves in 2015/16 was 527 thousand and 300 tons, of which 277 thousand and 200 tons of imported cotton were 100%, and the turnover rate of domestic cotton reached 98.43%.

The industry analyzes the reasons why the cotton reserves are difficult to cool down. On the one hand, it takes up more than 50% of the total import volume of imported cotton.

With the restriction of large volume of operations, it will not be able to go out in large quantities in the short term. Cotton enterprises are still in a state of cooking. The high quality reserves of Xinjiang cotton or Port Bonded cotton will become the main choice. On the other hand, the quality of the reserve cotton recheck low quality cotton is very prominent compared with the new cotton in 2015/16. For the spinning enterprises that spin C21, C32 or even C40S yarn, the reserve cotton can completely meet the needs of production and cotton blending.

As for grade 2228C2 cotton, the reserve cotton price is 10500-11000 yuan / ton.

The gross weight is 10800-11500 yuan / ton, and the spot price is less than 12000 yuan / ton.

Some textile enterprises believe that with the total turnover reaching 30-40% of the total 200 tons of cotton reserves, the state should consider opening a textile special field to enhance the entry threshold of traders and even postpone the qualification of non textile enterprises.

On the one hand, the auction is hot, the paction price has soared again and again, and the competitiveness of the yarn and cloth of the spinning enterprises has declined.

Take imported cotton in 2012 as an example. In May, the average price of the first week in 3-6 days was 12532 yuan / ton, and the average price was 12560 yuan / ton on May 9-13, and the average price was 12608 yuan / ton on May 16-20.

The proportion of quality cotton, cotton spinnability and cost performance is much higher than that of cotton and West African cotton in the past few weeks. The price of high quality reserve cotton goes all the way, and the profit of spinning and weaving of cotton enterprises decreases.

It is worth noting that in the first three weeks of the 3-20 days of May, the proportion of non textile enterprises competing for auction was 32.9%, 35% and 45.8% respectively, and the results of 23-27 days in May were not yet available. The industry expects that the auction rate of non textile enterprises is over 50%, of which the proportion of non-woven enterprises in the first three weeks is 35.9%, 39.2% and 57.95% respectively, indicating that traders' enthusiasm for high quality cotton has been rising continuously. Most of the reserve high-quality cotton resources are in the hands of non textile enterprises.

On the other hand, traders selling cotton reserves have considerable profits, and spin enterprises are somewhat passive.

Traders provide a one-stop service for textile enterprises, such as photo auction, advance payment, delivery, pportation and so on. From the survey of Jiangsu, Shandong, Hebei and other places, the prices of traders in Australia, cotton and West Africa are generally 14000-14500 yuan / ton, 13000-13300 yuan / ton, and there is no difference between the price of bonded cotton and West African cotton in port 2015/16. Traders generally have a profit of 500 yuan / ton. For some textile enterprises whose reserve price is limited and can not get high-quality cotton, they can only accept high priced spot goods. The advantage is that they do not need to buy large bundles of goods, and they have large amounts of funds to occupy (a large proportion of imported cotton bundles), and the risks are relatively controllable.