Last week (April 1st April 7th), textile orders gradually improved, raw material inventories decreased, and some enterprises increased their demand for restocking, driving a slight increase in domestic cotton prices. The trend of domestic and foreign cotton prices has also diverged.
Domestic market:
The Zheng cotton futures market has slightly rebounded, and some ginning enterprises have increased their willingness to sell at later prices. At the same time, the demand for cotton yarn in the market has increased, and the spot cotton market has slightly rebounded.
Entering April, the market gradually shifted its trading focus from the demand side to the supply of new cotton, and the planting of new cotton in Xinjiang has already begun. Southern Xinjiang cotton is about to start large-scale planting, and the Xinjiang Meteorological Observatory predicts that the suitable planting period for northern Xinjiang cotton is close to or slightly later than usual. Data shows that in 2024, the cotton planting area in Xinjiang may decrease by 1.8% year-on-year, at a low level in the past five years. The main reasons for the decrease in planting intention are: on the one hand, cotton production decreased last year, and seed cotton prices were lower than expected, leading to a decline in the enthusiasm of cotton farmers for planting; On the other hand, many areas continue to encourage the cultivation of other crops, squeezing out the cotton cultivation area due to limited land resources.International market:
During the Qingming Festival holiday, the futures price has fallen below the integer mark of 90 cents per pound. Overall, the price decline of ICE cotton during the main holiday period is still within the market's acceptable range, which is also conducive to the circulation of American cotton; In addition, the current tight inventory situation of American cotton has not been broken, and this pullback cannot be defined as a turning point for the continuous decline in American cotton prices.
In terms of demand:
Recently, there are signs of a rebound in the textile market. With the rise of temperature, the demand for summer orders has increased, and some cotton yarn traders have raised their prices. However, some yarn factories have not yet felt an increase in orders, and pre holiday orders have already been produced, resulting in differentiated performance in various markets. The current textile enterprises are still operating at a high level. Partial improvements have been made to all cotton fabric, and home textile brands have recently held ordering meetings. Home textile orders have been issued, with autumn and winter orders being the main focus.
Future Market Forecast:
In April, cotton from China and the United States will enter the planting and growth period, with a slight year-on-year decrease in the intended planting area of domestic cotton. However, the intended planting area of US cotton has increased year-on-year but is lower than the expected outlook. Since late March, the overall demand in the downstream market has improved, but there is still a lack of large orders. Currently, there is abundant domestic supply, and it is expected that cotton prices will remain volatile in the short term.