Chinese Cotton Prices Fell 3% Month-on-Month

Market News

Chinese Cotton Prices Fell 3% Month-on-Month

On March 23, the average domestic spot market price of lint cotton was 15,786 yuan/ton, down 3.09% month-on-month and up 36.84% year-on-year. From March 22nd to March 26th, the highest limit price of Xinjiang Cotton Wheels was 16265 yuan/ton (standard grade 3128B), a decrease of 122 yuan/ton from the previous week. As of the 23rd, the average price of the National Cotton Price Index B, which represents the market price of standard-grade lint in the Mainland, was 15,753 yuan/ton, down 3.2% month-on-month. According to the latest customs data, China imported 690,000 tons of cotton from January to February, an increase of 68.3% year-on-year, and the cumulative import in 2020/21 was 1.66 million tons, an increase of 102.4% year-on-year. ICAC's March global production and demand forecast shows that the global consumption in 2020/21 is 24.46 million tons, the output is expected to be 24.2 million tons, and the ending inventory is 21.11 million tons. Ministry of Rural Affairs in March: output 5.91 million tons, import 2.2 million tons, consumption 8.1 million tons, ending stock 7.34 million tons. During the high-level dialogue between China and the United States last week, expectations for cotton trade were pessimistic. The United States is the largest exporter of cotton and China is the largest consumer of cotton. And due to various influences such as the rise of the US dollar, the ICE cotton futures are coming down. Under the background of market pressure, the short-term trend is not promising. With the decline in cotton prices, downstream yarn companies have slowed down, and market demand has become more rational. In early and mid-March, Zhengzhou cotton continued to break through downwards and the prices of domestic yarn and imported cotton in the light textile markets of Guangdong, Jiangsu and Zhejiang have bottomed out by 500-1000 yuan/ton. In addition, clothing and foreign trade companies have seen substantial increases in raw materials and fluctuations in RMB. The reason is that it is more difficult to receive new orders, and the inquiries and purchases of cotton yarns and polyester-cotton yarns by weaving factories, fabrics and textile clothing companies have slowed down significantly compared with January and February. The market lacked confidence in the degree of consumption recovery in March and April. Originally, March was the peak textile season. Due to the sharp increase in the cost of raw materials in the early period, companies were cautious in receiving orders. Recently, textile raw materials have fallen at different rates. Port cotton stocks are at a high level and continue to rise. In addition, the supply of imported cotton from January to February 2021 has increased significantly, and the cotton market supply is in ample state. It is expected that the cotton market will fluctuate mainly in the short term in the future.