Can rising cotton prices increase yarn prices?

Since last week, the average price of the national cotton price index A (CNCottonA) representing the 229 cotton prices in the Mainland has been RMB 9,999/ton, up RMB 74/ton from the previous week; the country’s cotton price index B representing the Mainland's 328 cotton prices (CNC toton B) Average price was 19,163 yuan/ton, up 77 yuan/ton; 428 grade cotton average price was 18,530 yuan/ton, up 93 yuan/ton; China Cotton purchase price index (CNCottonS) average price was 18,468 yuan/ton, down 51 yuan/ton.

Recently, the domestic new cotton picking is basically completed, the sales progress exceeds 90%, and the grade of seed cotton is reduced. To ensure the quantity and quality of seed cotton acquisition, most of the deposit companies directly go into the cotton farmers' homes, conduct field test rolling and grade the seed cotton, and enter households. The purchase price of seed cotton can be reduced by 0.02-0.04 yuan/kg, and at the same time, the price of cottonseeds will increase, and the processing cost of cotton enterprises will decrease accordingly. According to the National Cotton Market Monitoring System, on December 25th, the national average price of Grade 3 seed cotton was 4.15 yuan/kg, up by 0.01 yuan/kg compared with December 18, and the price of cottonseed was 1.09 yuan/kg, up by 0.02 yuan from December 18th. / Jin, discounted cotton costs 18,436 yuan / ton, compared with December 18 fell 59 yuan / ton, lower than the national temporary storage price of 1964 yuan / ton; as of December 21, the country's cumulative acquisition of 6.29 million tons of lint, a year-on-year reduction 250,000 tons, a total of 58.1 million tons of processed lint, an increase of 911,000 tons, cumulative sales of 4.832 million tons of cotton, an increase of 1.806 million tons.

As of December 25, 2012, the cumulative transaction volume of cotton purchases and storages was 493,1280 tons, of which 3,735,150 tons were listed (1,492,830 tons sold in the Mainland and 2,240,320 tons sold in Xinjiang), and the cumulative turnover of key contractors was 1,198,030 tons. With the advancement of storage and storage, many cotton warehouses have become full, and cotton companies are worried that they may not be able to make deposits at a later stage and accelerate their acquisition progress in order to obtain more profits. According to Hebei Province's 400-type enterprises, the profits of the current deposits are relatively abundant, making up for the losses before December. Quzhou and Hengshui are the regions that collect and store 5 grades of cotton. Some enterprises report that the acquisition of 5th grade cotton has higher profit than that of good quality cotton. , There is little interest in spot sales. The spot market is in short supply. In recent days, prices have continued to rise. Textile companies are still adopting purchase-to-buy methods in order to maintain production. In addition, with the approaching of the import quota of 894,000 tons of 1% tariff cotton, the price of ICE futures cotton has gradually increased recently, and the price of imported cotton has also risen. Due to concerns that the tariff import policy will change by 40% next year, the textile mills will end The degree of interest in cotton outside Hong Kong has increased.

In the past week, the spot price of domestic cotton has risen, which has formed a support for the cotton yarn market. However, due to the long-term oversupply situation in the cotton yarn market, the price rise is weak, especially for products with lower quality levels. From the perspective of the transaction status of various products, the current status of mid- to high-end products is still acceptable. Some yarn prices have been raised slightly under the support of high-quality raw material costs. The price of JC32S knitting yarns used by small and medium-sized textile enterprises in Shandong is 30,300 yuan/ton. The weakness of the medium- and low-end product prices remains the same. Hubei Occidental Cowboys used OEC10S at prices of 17,000-17,300 yuan/ton, and shipments were normal. Enterprises in order to catch up before the Spring Festival to speed up inventory, in the sales process to give greater room for profit.

Recently, the price of ICE futures cotton has continued to oscillate upwards. Ship prices for out-of-sea cotton, port stocks, and bonded cotton have risen slightly. At the same time, rumours that the countries concerned have abandoned or increased cotton import quotas have become increasingly strong. Next year, textile mills will The import situation depends to a large extent on the national quota policy. Before the relevant rumors are confirmed, the market is expected to continue the wait-and-see atmosphere.