Imported Cotton Yarn Quotes "Strong Outside Market And Weak Inside" Traders Do Not Dare To Hoard Goods.

Although the main contract of ICE cotton futures has broken 75 cents / pound mark and India Pakistan yarn quotation in the past week, the State Council decided to substantially reduce the value added tax, which will effectively promote industrial development, reduce the cost of spinning enterprises and optimize the living environment. However, since mid March, Qingdao, Ningbo, Guangzhou and other ports have already cleared the price of cotton yarn, but the price has steadily declined. C16-C40S India, Pakistan and Vietnam producing ring spinning generally reduced by 100-200 yuan / ton, and OE yarn and Pakistan 10S-16S siro spinning barely stabilized.

Some cotton yarn importers said that due to the continuous increase in the quotation of cotton yarn outside India, Indonesia and Pakistan, the difficulty in signing the contract for futures yarn has been increasing continuously. In addition, factors such as the domestic cotton reserve policy in 2019 are still unclear, and the Sino US trade negotiation has been postponed to April, and other factors are expected to arrive in the 4/5/6 month.

Why is imported cotton yarn "strong outside and weak inside", out of a brief deviation from the market?

The views of the industry mainly include the following three points:

First, the RMB has continued to appreciate in recent months, and the actual customs clearance cost of imported cotton yarn has declined significantly, and the profit margins of import enterprises and middlemen have been enlarged, so that they can voluntarily give profits to downstream customers.

Since the beginning of 2019, the exchange rate of RMB against the US dollar has shown a more obvious trend of appreciation.

From the end of December 2018 to March 18, 2019, the central parity of RMB against the US dollar increased from 6.8632 to 6.7117, an appreciation of about 2.21%, and the competitiveness of imported cotton yarn increased.

Second, the "weathervane" Zhengzhou cotton yarn futures price and domestic cotton yarn spot paction price weak callback, cotton mill while "busy season" to seize the shipment.

According to statistics, on March 13-18, the CY1905 contract fell from 24620 to 24330, down 290 points, while the price of domestic OE yarn and ring spinning in Guangdong, Jiangsu and Zhejiang and Shandong markets also dropped 100-200 yuan / ton overall.

Thirdly, import enterprises and middlemen are worried about the lengthening of Sino US trade consultation and the weak market of global cotton and gauze consumption.

According to the Wall Street journal, the earliest meeting time between the two sides will be in April or the end of April (at least not in March).

In addition, the latest tracking index of Bloomberg shows that the quarterly annualized growth rate of the global economy has dropped to 2.1% from 4% in the middle of last year. The global economic growth slowed sharply in 2018, and the rate of expansion slowed down to the lowest level since the global financial crisis in 2008.