Market News Feedback: The Price Of Cotton At Home And Abroad Is Increasing

Market analysis: According to the feedback from cotton trading enterprises in Qingdao, Zhangjiagang and other places, the basis of bonded, spot and off ship cotton has stabilized in the past week. A few cotton enterprises have slightly increased the basis as the main force of ICE cotton futures contracts in December approached 70 cents/pound again, and the overall bonded cotton and RMB resources inquiry/transaction is still not improving.

A medium-sized cotton enterprise in Changzhou said that, supported by the current high cost of holding goods for traders, the large price chain of cotton with the same quality under 1% tariff, the same index and the high expectation of cotton enterprises for the issuance of additional sliding tariff cotton import quotas in 2024, the adjustment range of spot and ship price quotations of US dollar resources was significantly weaker than that of ICE futures, showing a certain resilience, The phenomenon of selling goods at reduced prices and "packing" shipment is rare.

From the quotation of some international cotton merchants and trade enterprises, since July, the quotation of port bonded Brazilian cotton, American cotton, African cotton, South American cotton and other cotton lint production areas has been quite different due to the difference in the cost of goods held by traders, the status of enterprise capital flow, and the judgment on the cotton market trend in 2024/25. The market is relatively chaotic, and the difference between high and low prices of Brazilian cotton in 2022/23 even exceeds 4 cents/pound, It is not only necessary for buyers to shop around, but also it is better to go to the warehouse to check the goods.

July 22-23 Bonded Brazilian cotton in Qingdao, Zhangjiagang, Wuhan and other places 1-5/32 (Qiangli 28/29GPT) net weight quotation is 79.74-81.74 cents/pound, and the direct import cost under 1% tariff is about 13970-14315 yuan/ton; On July 16, 3129B (breaking specific strength 28/29CN/TEX, main grade 31) warehouse in Henan, Shandong, Jiangsu and other inland provinces offered 15500-15800 yuan/ton of public weight (the buyer paid 128 yuan/ton for three months of automobile transportation and ex warehouse fees, and some enterprises quoted 15800 yuan/ton of lint for "Double 29" and above indicators). Considering the difference in net weight and public weight settlement, the current price of domestic and foreign cotton under 1% tariff is 1500-2000 yuan/ton, Compared with the first ten days of July, the price advantage of imported cotton continued to expand by 200 yuan/ton.

From the market feedback, due to the recent slowdown in the growth of Brazilian cotton and American cotton arrivals/warehousing compared with May and June, plus the rigid shipment of RMB resources and bonded spot goods, the cotton inventory in China's main ports continued to decline slightly, and the pressure on warehouse capacity was gradually eased. Some warehouses began to be centrally managed and vacated, with the shipment date of Australian cotton from July to October 2023/24 Brazil cotton is ready for warehousing. The industry estimates that as of July 20, the total inventory of bonded and non bonded cotton in China's main ports may have dropped to 545000 to 56000 tons.