According to feedback from cotton traders such as Zhangjiagang and Qingdao, since late February, except for a small amount of customs-cleared RMB resources at a fixed price, inquiries/shipments of bonded US cotton, Brazilian cotton, Australian cotton, etc. have continued to be deserted, especially in 1 / Some of the 2022/23 low-grade and low-index U.S. cotton that arrived in Hong Kong in February generally encountered a cold reception from Chinese buyers.
A cotton company in Shandong said that in February, the company had a total of 900 tons of US cotton, 500 tons of Australian cotton, and 450 tons of Brazilian cotton arriving at the port (mainly stored in Qingdao Port, Nantong Port, and Ningbo Port), but customers from Jiangsu, Zhejiang, Shandong and other places took the initiative Inquiries are relatively low. Even though ICE’s main contract is close to 80 cents/pound in mid-February, in addition to the obvious acceleration of ON-CALL point price contract transactions, consumer terminals are still cautious about replenishing bonded cotton and customs-cleared cotton, maintaining a “continuous” trend. Use the “buy as you go, purchase as you order” operating model. It is understood that since the price difference between customs clearance of 2022/23 US cotton, 2021/22 Brazilian cotton and Australian cotton and old cotton in stock is concentrated at 200-400 yuan/ton, the transaction situation of old cotton is slightly better than that of new cotton.
Several cotton textile companies in Jiangsu, Shandong and other places believe that the “strong expectations, weak reality” situation of foreign cotton shipments and port spot inquiries and transactions since February is exactly the same as the rise in cotton yarn after the Spring Festival, and traders have overestimated Before the end of February, the cotton import quota within the 1% tariff in 2022 will be released and used, and China’s epidemic prevention and control measures will be fully optimized. At the same time, export orders will pick up. At the same time, the escalation of the US/EU ban on Xinjiang cotton imports has underestimated the impact on Southeast Asia, South Asia, etc. The negative effect of various countries’ re-export/transport trade; coupled with the depreciation of the RMB against the US dollar in February also restricted the actual purchase of foreign cotton by Chinese enterprises at the port (throughout February, the spot exchange rate of the RMB against the US dollar fell by a total of 1,821 basis points, a decline of 2.69%; the central parity rate of RMB against the US dollar has fallen by 1,915 basis points cumulatively, with a decline of 2.83%) and other negative factors. So far, new export orders are still mainly short-term and bulk orders, and there is still a lack of medium- and long-term and large orders (including Traceability orders).
Judging from the survey, in the past week or so, some traders have continued to reduce or even suspend quotations for bonded cotton and customs-cleared cotton at ports. The wait-and-see sentiment is strong. The main ICE contract has stood at 85 cents/pound, and it has once again tested the 90 cents/pound mark. Strong expectations and a comprehensive recovery of global cotton consumption in 2022/23, a decline in cotton planting area in the United States, speculation about the weather in major cotton-producing areas, and a slowdown in the pace of interest rate hikes by the Federal Reserve have increased traders’ holding operations for selling.
</p
