Cotton price is difficult to breakthrough effectively

Due to the Spring Festival is near and the fluidity tighten increased once again, now the present situation of the spot cotton downturn will be difficult to change, but the downstream is facing the strong support of huge collection, and expected that it is extremely possible to keep the narrow oscillation. Recently, China-Zhengzhou cotton oscillation warms up, the center of main force CF1205 contract up, and the future price is around 20,700 Yuan a narrow line oscillations. Along with the continuous cotton reserves amplification, the medium and high grade of cotton quantity gradually become less, plus the expected must warm up, the market is expected that the liquidity bounteous situation will be upcoming, and support the cotton price goes strong slowly; however, due to the peripheral economy is rigorous, and now the upstream and downstream of textile industry chain frequency appears the order poor, and the textile enterprises use cotton cautiously, which it is difficult to abundance of purchasing situation, and the demands of cotton is more worried. Facing the supply enough and the demand poor of the double pressure, the Zhengzhou-cotton is difficult to form the market trends, and it is larger probability to continue to a narrow range of oscillation.

            

The economy of Europe and America has gotten, but the improvement of economy remains changeable and the capital wait-and-see mood sharpen. Last week, the European Central Bank introduced a refinancing plan that the scale is more than expectation, the United States employment and real estate continues to heat up, but the economy will be sustained progress remains to be verified, the market pessimism has not fundamental change. The weekly ICE cotton hold a position significantly reduced, reflecting the fund of arbitrage position is only for 8,721 pieces last week, compared with the early October 12543 hands fall down nearly 30%. At the same time, the position amount of Zhengzhou cotton has been reduced to the lowest since the two years, the main force of CF1205 contract is only 168,000 hands, the sign of capital at the feast is obvious, and the wait-and-see mood is strong.

 

At the end of the year, the funds of textile enterprises are nervous, and the adjustment of market expects warm up. According to the People's Bank of China data shows, by late November, our financial institutions to foreign exchange arrived at 25.45 trillion Yuan, which it declined 27.9 billion Yuan compared with October, this is the gap years of foreign exchange for the second straight month to reduce, at the same time it was the largest decline since December in 2007. Reducing the gap can be considered of foreign exchange for the policy must pave the road, the market expected that the central bank will do the operation of drop before and after of the New Year, on monetary policy for fine-tuning, appropriate let go of liquidity, this is like the long drought showers for textile industry.

 

Recently, the spot price stops the declination and the enterprise is stable, and the spot market inquiry increased, but it worried about the order and the downstream products sales, and the textile enterprise purchase are cautious, many enterprise still using a small purchase and first find buyers reproduction strategy, so the actual transaction is downturn. Near by the New Year's Day, it is the time of the library for the textile enterprises, while this year, because of a shortage of orders, purchasing has no obvious amplifier, and the spot market is weakness. The textile enterprise limited or even stop production has on common, some textile enterprise working on and off, and even some enterprise simply ahead of the shutdown. At present the yarn mill that the mainstream price of C32S is 25,500-26,000 Yuan/ton, and the higher price is in 27,000 Yuan/ton, if it produces according to 19,156 Yuan/ton of materials, which the profit is very thin, and the production enthusiasm of textile enterprise is not higher.

 

At present, the purchasing of mid-reserve cotton is near to the end, and the total purchase is continuously amplified, therefore the future price is vibration. Now it purchased successfully nearly 1.8 million tons, it is expected that the periods of collection issue 2.5 million-3 million tons, and most of the market higher cotton will enter the kingdom in the store, which the higher grade cotton may become more spruce in later, while imported the lower level of cotton, parts of textile enterprises began to reserve high-grade cotton for a rainy day. No doubt the cotton collection tightening liquidity; formed some support to the future price, but whether it can be stable cotton acreage in 2012 or not, it will also depend on the continuity of the policy. In addition, the national collection cotton is not spend, which it become national regulation to adjust the cotton price, it also will produce certain psychological pressure on the market.