SunSirs: China’s Cotton Market Rebounded, 3128B Lint Prices Rose by 7.25% Month-on-Month

　　1. Price quotes

　　On the 1st, the price of 3128B lint was around 17,756 yuan/ton, and on the 10th, the price was 77762 yuan/ton, an increase of 7.25% from the previous month.

　　2. Market analysis

　　On the 10th, the average price of China Cotton Index 3128B grade was 17,718 yuan/ton, an increase of 199 yuan/ton from the beginning of the month. The domestic cotton spot has experienced a volatile rise. Fundamentally, the supply side, dumping and sliding tax quotas have been exhausted, and the corporate reserve cotton bidding is active, and the high transaction price provides strong support for the cotton price. The delta mutant virus brought certain risks to the domestic market. Zheng Cotton once saw a downward adjustment trend, but downstream demand was optimistic. The market rebounded again last weekend, pushing the domestic cotton futures market to bring another wave of gains. The domestic cotton production is expected to decrease in the next year, and the decrease in the supply of seed cotton leads to strong market grab expectations, which will provide support for the cotton market in the future.

　　The international cotton market has risen, the growth of new cotton in the United States has generally been delayed, and the Indian cotton area has encountered heavy rains, supporting a slight increase in international cotton prices. As of the 9th, the International Cotton Price Index (SM) was 104.91 US cents/lb; the International Cotton Price Index (M) was 103.54 US cents/lb, up 1.14 US cents/lb. Affected by the epidemic, textile factories in South Asia and Southeast Asia have recently closed, export shipments have been blocked, and the return of overseas orders to textile companies ushered in a wave of good news.

　　3. Downstream industry chain

　　The cotton commercial inventory continues to decline, and the downstream textile companies have acceptable orders and considerable profits. After the price of cotton and cotton yarn rose sharply, the profits of downstream grey fabrics continued to narrow. The textile industry will usher in the traditional peak season of demand for gold, nine and silver, and there may still be room for growth in consumption, and textile companies are optimistic about demand in the later period. At present, cotton prices are supported by the downstream, and the market is still strong. It is expected to fluctuate and stabilize in the short term in the future. Pay attention to the impact of local prevention and control upgrades on cotton spinning mills’ orders, production, transportation, and delivery.