CHINA: Post-holiday cotton market situation and expectation
CHINA: Post-holiday cotton market situation and expectation

CHINA: Post-holiday cotton market situation and expectation

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Most downstream mills delay the restart time affected by the novel coronavirus and cotton traders have started offering prices from Feb 3, but sales are unfavorable.

Uncertain restart time of downstream plants
Most downstream mills plan to restart the operation from Feb 10, but due to the various policies in different regions, and the limited migrant workers, the overall resumption is uncertain. After the holiday, a few mills have purchased some feedstock from traders, but the buying interests are not high overall.

Expectation: mills that plan to revise up the yarn prices previously may change their idea and revise lower the yarn prices after the holiday. But ZCE cotton yarn futures have recovered somewhat after the slump on the first day returning from the Spring Festival holiday, after cotton yarn sales recover, cotton yarn prices may edge lower, and the decrement is supposed to be not large.


Offers of on-call cotton enlarge
Traders have restarted work basically on Feb 3-4. Basis of on-cal cotton has moved up by 200-400yuan/mt compared with the level before the holiday. Currently, traders mainly stand on the sidelines, and basis has been flat. On-call cotton sales are relatively thin, and the transactions are mainly from traders. Inquiries and transactions from mills are thin.

Expectation: some traders look pessimistic towards late market due to the uncertain situation on restart time of downstream mills and orders, and other traders hold looking-on mood and are not active to sell.

Conclusion: The restart time of downstream mills is still uncertain. Traders revise up the basis of on-call cotton after the holiday, and currently, cotton offers are flat, while sales are sporadic. Most traders hold pessimistic anticipation towards late market.



Πηγή: ccfgroup.com

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