Importing Cotton Middlemen Low Price, Overall Shipment Slow Pressure

Recently, the ICE cotton main contract fluctuated on the 60 cents / pound level. The two sides were stalemate and stalemate, and the market wait-and-see sentiment was heavy. On the one hand, although the expected increase in US cotton production in 2019/20 is expected to be stronger, the short term main cotton producing area is not very strong. It needs to be observed more closely. On the other hand, despite the aggressive cotton trade in Brazil in the year of 2018/19, trying to stand up to the US cotton market in the export market (2018 annual cotton production decline, quality decline, and no threat to the US cotton structure), considering the bad transport, warehousing and shipping conditions in Brazil, the buyer signed the treaty with great misgivings. In addition, the Sino US trade negotiation situation did not continue to deteriorate (to a certain degree of restraint), the situation in the Persian Gulf was slowing down, and all the central banks of the world started the rhythm of monetary easing and banknote printing. Therefore, there was no direction in the ICE cotton contracts, and 60 cents / pound became a "balance point" briefly. However, at present, bears still occupy a more obvious advantage. Therefore, "empty watch is not short, short time not to catch up".

According to the survey, a week ago, Qingdao, Zhangjiagang, Guangzhou and other ports bonded, the spot and far shipping date outside the cotton quotes (U.S. dollars and RMB) remained stable, ICE cotton stabilized, the loss is too large and Zheng cotton is showing signs of bottom, so traders and middlemen have a strong desire to lower prices. The price of consultation and transaction focused on 2018/19 cotton, cotton and West African cotton in Brazil, India cotton, Ukrainian cotton, 2018/19 new cotton and so on because of the low cost performance and not the concern and favor of the textile mill. The overall shipments of cotton were slow and the lack of effective transaction support. Some traders felt pressure, and short-term hopes were not great.

In August 19th, Qingdao port M1-1/8 Brazil cotton and S-61-5/32 net weight quoted price 13100-13200 yuan / ton, 13200-13300 yuan / ton; SM1-1/8 West Africa cotton (Mali, Burkina Faso, etc.) buyers own 1% tariff import quotas net price 12500-12600 yuan / ton. A trader in Zhangjiagang said that considering the possibility of making progress in the Sino US trade consultation in 2019/20 and the possibility of signing the agreement, it would still be Brazil cotton, India cotton, West African cotton and Australian cotton.