Market Analysis: Foreign Cotton Market Activity Needs To Be Improved

Recently, although Zheng Mian's trend resonates with ice's strong rebound and echoes with each other, it is obvious that it has not been able to get rid of the pattern of "strong outside and weak inside". An international cotton merchant believes that the main contract of ice in this round has been rising by 105 cents / pound, which is related to the strong demand of American families and the consumption of holiday season reaching a 17 year high. According to statistics, during the holiday season from November 1 to December 24, U.S. retail sales increased by 8.5% compared with the same period in 2020, the largest increase in 17 years. Compared with that before the outbreak in 2019, sales jumped nearly 11%.

On the other hand, the new crown special drug eased the panic of the market and investors. The US financial market and stock market closed higher for several consecutive trading days (the S & P 500 index reached a record closing high on Monday), coupled with the strong rebound of crude oil, agricultural products and precious metal commodity futures such as copper, zinc, lead and stainless steel in Europe and the United States (copper prices rose nearly 2% in the night trading on December 27), which supported ice cotton futures to open a "window" of 110 cents / pound and move the bottom of main contracts upward.

However, with the sharp rise in ice futures, Not only are a large number of on-call point price contracts forced to be delayed or even cancelled through negotiation (repurchased by international cotton merchants or exporters), but also the inquiry and delivery of American cotton / Brazilian cotton / Australian cotton and other ship goods / bonded goods such as American cotton / Brazilian cotton / Australian cotton are reduced or postponed because cotton textile enterprises are unable to digest the high cotton price. Moreover, the cotton import quota within 1% tariff in 2022 has not been issued and there is "overdraft" There are not many willing textile enterprises and traders, so the sharp rise of ice may be conducive to Indian cotton export to China market in 2021 / 22.

Textile Enterprises above Designated Size in Jiangsu, Shandong and other places said that although the continued rebound of ice led to some cotton traders to reduce the basis of foreign cotton quoted in US dollars, the scope and strength were obviously insufficient, the attractiveness to buyers was insufficient, and the market activity needed to be improved.