1、 Price quotation

According to the data of business agency, the cotton market rose sharply in July. On the 1st, the price of 3128b lint was about 16138 yuan / ton, and on the 31st, the price was about 17756 yuan / ton, an increase of 10.03% and 43.88% year-on-year in 2020.

2、 Market analysis

Domestic: in terms of spot, the market of China’s cotton price index 3128b rose. The price at the beginning of the month was 16091 yuan / ton, and the price at the end of the month was 17731 yuan / ton, up 1640 yuan / ton, or 10.19%. The national cotton inventory decreased month by month. As of June 30, the cotton industrial inventory of textile enterprises in the warehouse was 844600 tons, a decrease of 17800 tons compared with the end of last month; The total commercial cotton inventory in China was about 3.0173 million tons, down 15.67% month on month. The decline of cotton inventory shows that the operating rate of downstream textile enterprises remains high and the demand for raw materials is large.

In July, the national reserve cotton with a total volume of 600000 tons began bidding sales on July 5 and is planned to end on September 30. As of the end of July, the cumulative turnover was 191116.7431 tons, with a turnover rate of 100%, and the average transaction price was 16784 yuan / ton. The advantages of quality and price of reserve cotton resources for enterprises with tight raw material inventory have attracted the enthusiasm of enterprises to purchase, and the average price has risen sharply. In addition, the quota of 700000 tons of cotton import sliding tax has also been issued, which is lower than the market’s previous expectation of issuing 2 million tons. Compared with the quota issued in previous years, it is also relatively stable, and the upward risk of cotton price is reduced.

In terms of futures, the settlement price of Zheng Mian’s main contract on the 1st was 15890 yuan / ton, and the settlement price on the 30th was 17685 yuan / ton, up 1795 yuan / ton, up about 11.3%. According to the global production and demand forecast for July released by the U.S. Department of agriculture in the middle of the month, in 2021 / 22, the ending global cotton inventory will be reduced by 1.6 million bales month on month. Global consumption is expected to continue to recover, and the global cotton inventory consumption ratio continues to decline. Therefore, after the release of the report, the US cotton harvest rose, and the price of Zheng cotton rose.

International: according to the global cotton supply and demand forecast data of USDA in July, the total global cotton production increased month on month in 2021 / 22, the consumption increased significantly, the import and export trade volume decreased, and the ending inventory decreased again. In 2021 / 22, the domestic cotton output was 5.824 million tons, the superimposed import was 2.2177 million tons, and the throwing storage was 600000 tons. The total cotton supply in China was 8.601 million tons, while the current annual total demand predicted by USDA was 8.927 million tons, maintaining the pattern of supply exceeding demand, and the ending inventory is expected to decline.

3、 Downstream industry chain

By June 2021, the total retail sales of clothing, shoes and hats, needles and textiles in China had reached 117.4 billion yuan, a year-on-year increase of 12.8%. Benefiting from the recovery of market demand, textile enterprises have good orders, spinning profits continue to maintain a good state, and there is little operating pressure. From January to June, the yarn output was 13.558 million tons, with a year-on-year increase of 17.8%. Under the condition of high spinning profit, the upward support of cotton price is obvious. Due to the gradual increase of orders in autumn and winter, the operating rate of downstream weaving enterprises of textile enterprises has increased, the enterprises are optimistic about the future market, and there is a large demand for supplementary cotton raw materials. But at the same time, in the expectation of the peak consumption season, the market’s worries remain, the industrial chain shows signs of poor price transmission, and the grey cloth price has not been able to rise against this background. The future cotton market mainly depends on the demand side. It is expected that the cotton price may fluctuate in the short term.