China US Agreement Signed Cotton Price Consolidation

According to the price monitoring of the business community, the average price of 3128B grade lint in the domestic spot market was 13901 yuan / ton as of January 17, 2020, compared with the 14 price in January, which dropped by 138 yuan / ton, or 0.98%, down 9.54% from last year. In January 17th, the 2005 contract of zhengmian main contract closed at 14030 yuan / ton, down 400 yuan / ton compared with January 13th closing price. In January 16th, March, the contract was 70.22 cents per pound, down 131 points from 13, and 71.19 cents per pound in May, down 148 points.

According to relevant data, in 2017, the United States exported 2 million 500 thousand tons of cotton to China, with a total value of about 1 billion dollars, but because of tariff reasons, the share of cotton in the United States dropped to about 18% last year. The signing of the first Sino US trade agreement and the inclusion of cotton in the procurement list are unclear. On the other hand, the output of cotton in Australia was greatly reduced in 2019, the quality of cotton in India was difficult to stand on the table, and the price of cotton in Brazil was high. In 2020, the tension of US cotton exports to China was eased.

According to the price monitoring of business associations, as of January 17, 2020, the average price of 32S cotton knitted pure cotton yarn in Shandong area was 21975 yuan / ton, up 0.25% from the beginning of the month, down 10.40% from the same period last year.

Near the Spring Festival, some factories have low inventories and the majority of orders are produced. At the same time, logistical outages are coming soon, and orders are coming to an end. The external quotations of cotton mills are basically stable, and a few due to rising cotton prices. In the first three quarters of 2019, the cotton market was struggling and did not see big gains. Cotton yarn sales also shrank. However, after the first Sino US agreement was voicing, the price of cotton gradually recovered in October. According to statistics, in December 2019, China's textile and clothing exports amounted to US $24 billion 954 million, an increase of 13.07%, an increase of 7.95% over the same period last year. Among them, exports of textiles (including textile yarns, fabrics and articles) amounted to US $11 billion 6 million 100 thousand, up 11.37% over the same period last year.

Business analysts believe that the signing of the first stage trade agreement between China and the United States has been completed, but the number of Chinese cotton imports is not yet clear. At the end of the year, profits were closed, cotton futures fell, spot sales were flat, and prices were expected to fall.