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Sluggish textile demand; cooled down reserve trade

Sluggish textile demand; cooled down reserve trade Source: www.china-cotton.org
Date: 08-02-2013
Visits: 189
Very Poor

Since reserve release in 14th January, transaction completion against daily target reduced from 80% at the beginning to 20% by last weekend, and the average price converted in type328 was 200 Yuan lower than equivalent spot price. By 25th January, reserve release projection volume was 717,500 ton, among which 291,100 ton completed by 40.57%. Analysis on the reduction of reserve trade said, first, recent released reserve cotton comprised by old season commercial cotton and old import cotton in low grade, which could not meet the actual demand for high quality cotton for high counted combed yarn; second, downstream products like cotton yarn and gray fabric had sluggish sell, companies then did not have strong purchase intention with tight liquidity and advanced holiday off before Spring Festival; third, textile companies were not hurry with reserve purchase with such sufficient reserve stock.
 
Recently, tense fog hovered in most cotton areas, increasing the moisture content for seed cotton processing, and impeding the lint transport in some degree. Reserve trade reduced to 19% of the weekly target at this later selling period. By 25th January, 2012, the 2012/13 reserve trade volume totaled 5,950,700 ton, comprising 2,510,900 ton in Xinjiang, 1,879,700 ton in inland, and 1,560,100 ton by key enterprises.
 
Due to sluggish downstream demand, last week, 21st/25th January, domestic spot price declined slightly, CC Index328 completed the continued moderate increase since the beginning of July, 2012, and settled at 19,281 Yuan per ton, 7 Yuan down over the week.

ZCE cotton futures increased continually due to limited warrants, nearby contract CF303 settled at 20,165 Yuan per ton, 170 Yuan up over the week; CNCE nearby contract MA1302 settled with average price of 19,268 Yuan per ton, 86 Yuan down over the week.

Seed cotton procuring price was steady, according to survey of CCA cotton processing industry branch, last week, seed cotton equivalent to type 428 had weekly average price of 8.31 Yuan per ton nationally, 0.01 Yuan up over the week.
 
As for international market, ICE cotton futures nearby contact declined slightly, on 25th January, it settled at 80.52 cent/lb., 1.97 cent up over the week; Cotlook A settled at 89.5 cent/lb., 4 cent up; and FC Index settled at 90.17 cent/lb., 2.47 cent up over the week.
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