Market Analysis: Where Will The Cotton Market Go

 

      In addition, it is learned from the downstream textile and weaving enterprises that the orders of enterprises are small, the gauze begins to accumulate in stock, and the yarn prices of textile enterprises are difficult to sell. For textile enterprises, there are losses, and there is an increasing trend. Many textile enterprises begin to consider the spring Festival holiday ahead of schedule.

      In terms of specific contracts, cotton 01 contract is close to delivery. At present, the relative position of registered warehouse receipts is relatively small. In addition, there are still more than 1000 basis differences. The market is worried that the cotton contract in January may be forced. Therefore, before the delivery in January, cotton may still follow the logic of delivery and cost, and the market may still be in a volatile trend of partial rebound, Whether there will be a soft close to the market, we need to pay attention to the recent registration of warehouse receipts.

      In the medium and long term, the huge difference between domestic and foreign cotton prices will erode China's downstream foreign orders, and eventually lead to the domestic demand becoming very poor, textile enterprises have to start the shutdown mode to force down the cotton price. Therefore, cotton is weak in the medium and long term.

      But there is another possibility that the optimistic expectation of the virus is wrong. The new mutated virus directly causes global paralysis again, and China once again becomes the focus of global manufacturing industry relying on its strong epidemic prevention and control ability, which will make large-scale inflow of external orders again, and form a beneficial support for cotton.