Foreign Trade Orders Have Been Restored, Textile Enterprises Have Been Purchasing Cotton

- May 05, 2020-

    Since April, domestic and foreign cotton prices steady consolidation, ICE slightly strong performance. As of April 29, ICE's main contract price was around 57 cents per pound, up about 12% in April. Zheng cotton's main CF2009 contract price is around 11,500 yuan/ton, up about 5% in April.

    A market personage after visiting shandong huixian, yanjin, weishi, taikang and other places of more than a dozen textile mills told reporters, shandong part of the textile enterprises have returned to normal procurement of cotton raw materials, inventory also recovered to about 2 months. Lint quote still show confusion, in 11,500 -12200 yuan/ton, compared with the end of march overall rise of about 400 yuan/ton. It is understood that although the current cotton prices have rebounded, but still in a relatively low level, the textile enterprises purchase lint quantity overall slightly increased, one is the textile enterprises orders have recovered, began a small amount of replenishment procurement; Second, the market generally believes that the future cotton price rise is a high probability event, and the peripheral market shows a good momentum, in the cotton price is still relatively low a small amount of stock, but also to some extent to reduce the future cotton price rise significantly when the business risk to enterprises; Third, textile enterprises generally have the psychology of buying up not buying down, and zheng cotton futures narrow shock slightly up also reflects the market temperature expectations.

    It is understood that the enterprises visited by the market personnel are mainly engaged in the production of compact spinning. At present, the sales of 60 yarns are in short supply, and the sales of 32 and 40 yarns are not smooth compared with other specifications. The yarn inventory is generally more than 20 days, which is higher than that of the same period last year, but slightly lower than that of march.

    As covid-19 appears to be slowing down, governments have announced plans for a "gradual" economic reboot in May, with cautious plans to return to work and unblock the virus in an effort to reduce its economic impact. This plan not only to the domestic cotton market psychology into a shot in the arm, but also to overseas procurement enterprises to open up trade confidence. From mid-to-late April, the foreign trade orders of some textile enterprises in yanjin area of shandong province have recovered, and the processing and printing work has been started.