Global Observation: Global Trend Turbulence Cotton Prices Continue To Remain Weak Shock

The domestic cotton price range fluctuated last week. The higher contracted volume of American cotton exports and the slower progress of American cotton picking can provide some support for international cotton prices, but the escalation of the conflict between Russia and Ukraine and the expected warming of interest rate hikes in Japan are not conducive to higher commodity prices. The progress of domestic cotton processing inspection is significantly faster than that in previous years. At present, domestic cotton supply is loose and downstream demand is seasonally shrinking. It is expected that cotton prices may continue to suffer from weak shocks. 　

　 1、 Last week's price review

On November 18-22, cotton prices at home and abroad fluctuated slightly, and the average price was lower than last week. The average settlement price of the main contract of Zhengzhou cotton futures was 13919 yuan/ton, down 156 yuan/ton from the previous week, or 1.1%; The national cotton price B index, which represents the market price of standard lint in the mainland, averaged 15300 yuan/ton, down 63 yuan/ton or 0.4% from the previous week. The average settlement price of the main contract of cotton futures in New York was 69.95 cents/pound, down 0.82 cents/pound from the previous week, or 1.2%; The international cotton index (M), which represents the average landed price of imported cotton at China's main port, was 78.37 cents/pound, down 2.13 cents/pound or 2.6% from the previous week. It was converted into RMB 13542 yuan/ton (calculated at 1% tariff, excluding port sundries and freight), down 366 yuan/ton or 2.6% from the previous week. The domestic cotton price is 1758 yuan/ton higher than the international cotton price, and the price difference is 303 yuan/ton larger than the previous week. The average price of domestic C32S combed pure cotton yarn is 21423 yuan/ton, down 108 yuan/ton from the previous week. The average price of conventional outer yarn is 22344 yuan/ton, down 57 yuan/ton from the previous week. The price of polyester staple fiber is 7046 yuan/ton, down 35 yuan/ton from the previous week.

　 2、 Recent market situation outlook

（1） International market

The basic situation of the cotton market has improved, and the uncertainty of the surrounding environment has increased. In the past more than a month, the contracted volume of American cotton exports has generally shown a recovery growth trend. By the week of November 14, the net export of American upland cotton in 2024/25 had reached a new weekly high of 72200 tons. Affected by the rainfall in the earlier period, the progress of American cotton picking slowed down compared with the earlier period. As of November 17, the picking rate of American cotton was 77%, which decreased from 8% last week to 2% this week compared with the average growth rate of the same period in the past five years. These factors can provide some support for international cotton prices. But the uncertainty of the surrounding environment increases. Recently, the Russian Ukrainian conflict shows signs of escalation. On November 19, 2024, Ukraine attacked the Russian state of Bryansk. This is the first time since the outbreak of the conflict between Russia and Ukraine that Ukrainian troops have attacked Russia, causing widespread concern in the international community, and the market's concern about the global economic situation has intensified. In addition, due to the accelerated rise of Japan's inflation rate and the sharp decline of the yen exchange rate, analysts generally believe that the possibility of the Bank of Japan raising interest rates again in December is increasing, and its negative impact on the commodity market deserves attention.

　　 （2） Domestic market

New cotton supply accelerated, downstream demand weakened, and cotton prices continued to be weak. On the whole, as the progress of cotton processing inspection is significantly faster than that in previous years, the current domestic cotton supply is loose, while the downstream demand is seasonal weakened, and the cotton price is expected to continue to fluctuate weakly. According to the data from the National Cotton Market Monitoring System and the China Fiber Quality Monitoring Center, as of November 21, the picking progress of new cotton nationwide was 98.8%, and the processing rate was 59.8%, 1.5 and 6.4 percentage points higher than the average of the past four years; The cotton inspection volume was 2.996 million tons, an increase of 520000 tons year on year. In terms of the downstream textile market, the market has obvious off-season characteristics, the inventory of finished products has accumulated, and the price difference between yarn and cotton has further narrowed. According to the feedback of cotton textile enterprises in Jiangsu, Zhejiang, Shandong and other places, the recent new orders have decreased compared with the previous period, cotton yarn shipments have slowed down, and the spinning profit of enterprises is insufficient, leading to tight cash flow.