Sino US Trade War Dragged Down Cotton Vulnerable

On September 17, 2018, the US government announced that it would levy an import duty of 10% on the $200 billion commodity originally produced in China from September 24th, and will raise the tariff rate to 25% in January 1, 2019.

Subsequently, the Chinese side decided to impose tariffs on the commodities listed in the United States and Canada on the announcement of the 63 announcement of the Ministry of Commerce and the 6 of the Tax Committee's Announcement No. 6. The tariff was added to the 2493 items of tax goods listed in Annex 1 and 1078 tax items listed in Annex 2, and the customs duties were added to the 974 items of tax goods listed in Annex 3 and the tax items collected in the annex 974 of the 6 items.

Sino US trade war escalated again and again.

Exports at the same time, but also long-term bearish domestic cotton consumption, internal and external cotton dropped significantly, ICE cotton fell to the lowest level in the past six months, once again broken 80 cents line, Zheng cotton main contract 1901 decline was close to 4%, 16000 yuan / ton.

US cotton import costs rise

　　美国对中国2000亿进口商品加征关税名单中，棉花、纺织产品等位列其中，我国近几年年度棉花进口量百余吨，美棉进口量占据“半壁江山”，据海关最新统计，2018年1-7月份我国累计进口棉花82万吨，同比增加13%，2017/18年度以来(2017.9-2018.7)我国累计进口棉花117万吨，同比增加14%)，2017年我国进口美棉数量同比几近翻倍，在美棉质量以及价格等优于其他进口国家的背景下，2018年美棉进口数量仍有增加预期，但进口关税提高后，配额内进口美棉的税率将从1%升至26%，对应的进口成本将直接提高3300元/吨以上，美棉进口数量或处于停滞状态，另外自2016年以来国储棉大规模抛储，国储棉库存大比例下降，预计本年度抛储约260万吨，国储棉库存数量余量240万吨左右，位于安全库存临界线，预计2019年以后，国储棉净投放可能性偏小，为保证国家储备或以轮入为主，国内供需

The gap will be

To make up for the high import price of US cotton, the 1% tariff quota of imported cotton in the late stage or the purchase of cotton with high quality grade may be good for cotton, black cotton and West African cotton in the future, while the newly increased 800 thousand tons sliding quota or India cotton with relatively low price.

Downstream enterprises in the domestic market have greater impact.

The impact of Sino US trade disputes on cotton is mainly concentrated on increasing tariffs. Our competitiveness in the export of textiles and clothing in the United States has weakened, and the United States has increased the cost of our imports of cotton.

The trade war has intensified again, and the first is the domestic textile and garment enterprises.

The share of export accounts for about 17% of the total export share, and the cost of cotton increases after the Levy of tariffs. The increase in the cost of downstream spinning products will further compress the profits of cotton spinning enterprises, thereby reducing the export competitiveness of textile enterprises. On the other hand, the increase in domestic cost will cause resistance to the development of spinning enterprises, and the domestic cotton consumption demand will also be affected by linkage, resulting in a negative situation for domestic cotton market.

Zheng cotton short term hard to change

Zheng cotton main contract 1901 in 15900 yuan / ton line to find support, the support needs to be verified.

In addition, affected by the crash of the futures market, the purchase price of new cotton seed cotton has dropped 0.1-0.5 yuan / Jin during the day, while the recent cotton substitute is polyester.

The sharp drop in the cotton market has also made it worse. The pessimism of the trade war and the market will spread.