Seisha
The commodity market analysis system of the business community helps you grasp the market of bulk raw materials, welcome to subscribe!
Since May, the peak demand season has passed, the domestic cotton market continues to fall, in the context of the sharp decline in US cotton, internal and external linkage, Zheng cotton decline increased. According to the commodity market analysis system of the business community, the spot price of 3128B lint on May 12 was 16,320 yuan/ton, down 1.87% from the beginning of the month and 4.92% from the previous month.
As of the 10th, the settlement price of Zhengmian's main contract was 15,195 yuan/ton, down 3.2% from the beginning of the month and 7.5% from the previous month. In the face of the macro disturbance of U.S. cotton, the settlement price of the main ICE cotton contract was 77.31 cents/pound, down 9.3% from the previous month. Starting from February 28, 2024, the price of cotton in the U.S. market has fallen significantly, and the maximum decline in the U.S. cotton 07 contract has reached 27.03%.
Judging from the price comparison chart, cotton prices have risen from April to October last year, mainly due to the disturbance of weather factors during cotton planting in April, the market speculation atmosphere is strong, coupled with the sharp decline in commercial inventories, and the worry about the supply side, so that cotton prices have been rising to a high level. This year, cotton prices have entered a downward channel since April, with less weather disturbances, coupled with a sharp increase in imported cotton, weakened overseas export markets, and the market fell.
China's cotton plantings in 2024/25 down 1.5% from previous year
The Ministry of Agriculture and Rural Affairs released an analysis of China's agricultural product supply and demand situation in May, forecasting this month that China's cotton sowing area in 2024/25 will be 2,747 thousand hectares (41.202 million mu), down 1.5% from the previous season. As the largest cotton production base in China, cotton sowing in Xinjiang is basically over. Judging from the feedback from cotton farmers in many places, the weather in Xinjiang at the peak of cotton sowing this year was generally good, the land moisture was moderate, and the emergence and growth of cotton seedlings were generally good. Although the cotton planting area in Xinjiang continues to decrease, the year-on-year decline is lower than last year. According to data from China Cotton Information Network, in 2024, the cotton planting area in Xinjiang will be lowered by 230,000 mu month-on-month to 35.87 million mu, a year-on-year decrease of 2.2%; According to the average cotton yield estimate in the past three years, the total output was 5.488 million tons, a year-on-year decrease of 1.9%.
USDA: U.S. cotton planting area increased sharply, and global cotton production and consumption increased
The USDA's May 11 supply and demand report forecasts for U.S. cotton planting in 2024/2025. According to the report, cotton acreage is expected to be 10.67 million acres and harvested area is 9.13 million acres, an increase of 2.7 million acres year-over-year, and yields are expected to be 842 pounds per acre. Due to the good soil moisture in southwest China, the yield rate of U.S. cotton is expected to be lower than the average of the past decade.
USDA May Global Production, Sales and Inventory Forecast (10,000 tons)
Globally, global cotton supply in 2024/25 increased year-on-year, global opening stocks remained unchanged, global cotton consumption is expected to increase by 3% year-on-year, and ending stocks are expected to rise. Global cotton production is expected to increase by almost 5 percent, the report suggests, as global acreage and yields are expected to rise, with increases in Brazil, the United States and Turkey more than offsetting declines in China and India. Cotton consumption and trade will also expand, reaching a nearly four-year high. Global ending stocks of cotton are estimated at 83 million bales, up 2.5 million bales year-on-year, as cotton production exceeds consumption. In 2023/24, global cotton production and consumption increased month-on-month, with global ending stocks expected at 80.5 million bales, down 2.6 million bales from the previous quarter. The overall data is neutral and bearish.
The operating rate of downstream textile enterprises decreased sharply year-on-year, and yarn inventory increased
As of May 9, the average operating rate of textile enterprises in mainstream areas of the country was 80.3%, down 0.90% week-on-week and 12.30% year-on-year. According to the latest data, the yarn inventory of textile enterprises in mainstream areas of the country was 26.4 days, a week-on-week decrease of 0.38% and a year-on-year increase of 61.96%. In the face of the off-season and the falling price of cotton futures, yarn mills just need to purchase lint, and the willingness of textile enterprises to reduce production capacity has increased.
The weaving order situation has dropped significantly, the price competition of quantity orders is fierce, and the profits are meager. The shipping speed of grey fabrics in the weaving market in spring and summer has gradually declined, and the new orders in the market are mostly small orders and scattered orders, and the follow-up will be moderately stocked to maintain the operating rate, but the raw materials such as cotton yarn are generally not expected to be strong, and the plan is to adopt "buy as you go, place orders on demand".
China's textile and apparel exports fell 3.12% year-on-year in April 2024
In April 2024, the export value of textile and apparel in mainland China was 23.934 billion US dollars, a year-on-year decrease of 3.12%. Among them, the export value of textiles (including textile yarns, fabrics and products) was 12.190 billion US dollars, a year-on-year decrease of 2.36%; The export value of clothing (including clothing and clothing accessories) was 11.744 billion US dollars, a year-on-year decrease of 3.90%. From January to April 2024, the cumulative export value of textiles and apparel in mainland China was US$89.836 billion, a year-on-year increase of 0.58%, of which the cumulative export value of textiles was US$44.280 billion, a year-on-year increase of 1.19%; The cumulative export value of clothing was 45.556 billion US dollars, flat year-on-year.
Forecast for the future:
At present, the domestic cotton supply is sufficient, with the sharp drop in cotton prices, the willingness of enterprises to replenish the warehouse has increased, and the commercial inventory of cotton may enter the stage of destocking. However, due to the overall suitable weather during cotton planting this year, cotton seedlings and growth are generally better. Although the planting area has declined year-on-year, but the magnitude is not large, the market is expected to reduce production in the new year, the heat of capital speculation has declined, the weather driving force is insufficient, the downstream demand is gradually weakening, the market confidence is insufficient, the market outlook is slightly confused, and the weak demand side has formed a certain drag on cotton prices. It is expected that cotton prices will remain weak in May, and we will continue to pay attention to the growth of cotton in the new year and changes in downstream orders.