ICE Cotton Rise Is Conducive To China'S Textile Enterprises?

July 8-13, ICE futures disk follows Zheng cotton,

The auction price rose sharply. In the four trading days, the December contract rose 10.33 cents / pound, or 16.03%. The price of US cotton, Australia cotton, West Africa cotton and other bonded spot and the monthly shipping price all rose sharply. In July 12th, the US cotton quotations rose by 4 cents per pound in July 12th, and the 13 day quotation rose again by 2-3 cents / pound.

In July 12th, the CNF quotations of 7/8, EMOTSM, C/ASM and Australia cotton SM13/16 were 79.20 cents / pound, 81 cents / pound, 85.20 cents / pound respectively, while 12 days, the factory price of India's S-6 and J34 ginning plants rose to 86.90 cents / pound, 86 cents / pound respectively, and the National yarn factories in India and Pakistan gradually abandoned the purchase of India cotton, and imported large quantities of cotton and cotton in the United States, not only the price was 5-7 cents / pound, but also the lint quality, "three silk" and consistency were significantly higher than India cotton.

Some institutions and cotton enterprises analysis, ICE cotton and international cotton prices rose sharply, so that the price difference between inside and outside cotton was reduced again, the cost of cotton yarn in India, Vietnam, Bangladesh, Indonesia and other places rose straight, and the quotations of FOB, CNF and CIF will be greatly upwards. The number of yarn outside C40S and below is even with that of national yarn, and even the "hang upside down" comes again. The competitiveness of domestic yarn, grey cloth and clothing has been improved. The rise of cotton during the ICE period is more advantageous to the Chinese cotton manufacturers than that of the Chinese cotton manufacturers.

However, I do not fully agree with this view. The reasons are as follows:

First of all, the cotton spinning industry has a long production cycle, and the external sales space caused by the increase in cotton prices is not smooth.

Generally speaking, from yarn orders to orders, delivery generally takes 45-60 days. Since the middle of June, domestic spinning, weaving and

Foreign trade companies have entered into orders, sent orders and produced off-season, plus the paction price of national cotton and cotton futures.

"No rice under the pan" or "pick up on the deficit" situation is more common, gauze inventory continues to rise slightly.

Several foreign trade companies in Henan, Jiangsu, Zhejiang, Shandong and other places indicated that the orders in 5 and June were enlarged because of the huge increase in cotton prices. The enthusiasm of the processing parties to deliver the goods according to the contract was not high, and the lack of suitable raw materials, the shortage of cotton and the failure of cotton yarns to become standard became the excuse of the yarn factory.

Second, Vietnam, India and Pakistan cotton mill FOB and CNF quotation adjustment slowly, the internal and external yarn price "upside down" phenomenon basically disappeared, China imports or comeback.

From the survey, although the factory price of S-6 ginning mill in mid July was as high as 86.90 cents / pound, the CNF quotation of C21-C32 yarn of the India Pakistan cotton mill remained at 2.30-2.33 US dollars / kg, 2.62-2.65 US dollars / kg, which only increased by 0.01-0.02 dollars / kg compared with last week. Vietnam's C32SA yarn quoted price is 2.65-2.67 US dollar / kg, and the confidence of the mills and exporters is not enough. The profits of foreign manufacturers have been greatly reduced, and the proportion of production and production cuts has been increasing.

Contrast with the caution of the rising yarn, the price of domestic yarn has risen by 500-800 yuan / ton, and 40S high combed yarn has risen 1000-1200 yuan / ton. Under the premise that cotton price has risen 1800-2000 yuan / ton, textile enterprises have no profit margin and no profit to downstream clothing and trading companies.

In addition, the cost of importing high-quality cotton with cotton enterprises has risen sharply.

Judging from the cotton blending of high spinning yarn, the color grade of national cotton in 2012 and 2013 is mainly "21", "22", "13", "14" and so on. With the disadvantages of high content and poor consistency of "three silk", it is impossible to achieve the contract requirements for spinning 40S and more count combed yarn and high yarn. Therefore, most of the cotton mills currently use high quality national storage cotton + imported Australian cotton (or American cotton), 2012 annual storage cotton and +2015/16 cotton Xinjiang cotton.

From the statistics point of view, as at the end of June, the enterprises still have 35-40 tons of 1% tons of cotton import quotas within the tariff, which have not yet been used, and the spinning enterprises are buying good water with good steel on the knife edge. ICE cotton boom is not conducive to the import of cotton, even if the cotton import quota is increased, such a high spot price of cotton also has hinders the buyers.