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First Suppress And Then Raise, Cotton Price Trend Analysis In 2012

2012/4/7 7:58:00 5

Consumption Atrophy Policy Tilt Macro Economy

National Trust Market

store up

The policy has ended. In the era of post purchase and storage, where will cotton prices go?

store up

Will lead to a substantial reduction in domestic cotton supply, and at the same time, in April, when the spring sowing period, the global cotton planting area may be reduced by about 10%, and weather variables will constitute a support for cotton prices.

However, from the perspective of supply and demand, the future market is not optimistic.

Storage will not lead to tight supply in China.

From September 2011 to February 2012, China imported a total of 2 million 616 thousand tons of cotton (21110, -5.00, -0.02%), of which 1 million 510 thousand tons of general trade and 384 thousand tons of raw materials processing. It is expected that the volume of clearance will not be less than 500 thousand tons in March, and the amount of imported cotton will reach 2 million 394 thousand tons in September 2011 March 2012.

After the end of the purchase and storage, the government will issue at least 500 thousand tons of import quotas, and the quota will reach 2 million 500 thousand tons in 2012. However, the quota of 1 million 130 thousand tons will be used in 2012 and March in 2012. After March, China can import at least 1 million 370 thousand tons of cotton, and the supply of imported cotton will reach 3 million 760 thousand tons.

New supply of 8 million 110 thousand tonnes this year, China's end of 2010/2011

Stock

For the 2 million 520 thousand tons, the 300 thousand and 2 million 220 thousand tons of commercial and industrial stocks were sold.

In the case of no dumping, the current year

Supply quantity

Up to 10 million 330 thousand tons.

Economic growth slows down and consumption shrinks sharply.

In terms of consumption, since the beginning of 2011, the global economic growth has slowed down, and the EU is facing the sovereign debt crisis.

consumption

It has shrunk in the past two years.

The high cost of China has led to a sharp contraction in exports of textiles and clothing, resulting in a sharp decline in consumption in China.

We believe that in the current year, China's monthly consumption is about 700 thousand tons, annual consumption is about 8 million 400 thousand tons, and the possibility of below 8 million tons is not ruled out.

Therefore, as of the end of August 2012, China's commercial and industrial inventories are still as high as 2 million 320 thousand tons, which is enough to use the new cotton market in the next 9 and 10 months, and there will be no shortfall in the market.

From the perspective of new supply and consumption this year, the supply is slightly less than the consumption without dumping.

But last year's commercial and industrial end inventory is enough to make up for the shortfall, and there will be no obvious supply shortage.

Policy toward textile enterprises

According to legend, after the end of the storage and purchase, based on Tengyuan and increasing market supply, the central storage cotton may sell 300 thousand tons of Chen cotton under the price of less than 19800 yuan / ton, and may sell 1 million 200 thousand tons of low grade cotton stored in the current year.

As a result, 300 thousand to 1 million 500 thousand tons of new supply are likely to be added this year.

Although dumping and storage may not be able to respond to the market, there will be great pressure on cotton prices in the face of sluggish consumption.

After the end of the purchase and storage, local enterprises will be required to make loans at the latest end of May at the end of the year. The market will be able to withstand the sell-off from hoarding cotton enterprises in the 4 and May markets. After losing the reserve price, the domestic cotton prices may fall below the 19800 yuan / ton storage price.

Macro economy dominates cotton prices

From the analysis of supply and demand data, storage will not lead to resource shortage. Although the tension of high-grade cotton may be high at the end of the year, it is not enough to stimulate cotton prices to rise. The future market will be in the stage of de stocking, and commercial and industrial stocks will be replaced by the national reserve.

In the case of slow economic growth and low confidence in the market, downstream enterprises mainly focus on product inventory.

Domestic cotton prices are hard to rise until the overall market confidence has not recovered, the domestic and foreign cotton prices remain high and enterprises are no longer stockpiling.

In the second half of 2011/2012, cotton prices may show a trend of first inhibition and then upward trend. The macroeconomic trend will be the focus of market attention, while the 20400 yuan / ton purchase price will constitute a support for cotton prices in 8 and September.