Weekly Report: Cotton Market (Aug.15- Aug.19)

Cotton price turned steady in spot market this week. Tentative increase occurred in some regions. However, downstream textile manufacturers did the purchase according to the needs, so the demand is still weak. Ended by this week, Sinkiang PositiveⅢ Gaoma Ginned cotton was quoted 20900 Yuan/ton (gross weight), increased 300 Yuan compared with the beginning of this week. Futures price of warehouse receipt cotton is quoted 19500-19800 Yuan/ton, keeps even with the beginning of this week. Import cotton is fluctuating among 19500-20500 Yuan/ton. The global economy is gloomy recently; the overall domestic economy is slowdown in China. Textile industry has not got out of the weakness yet and cotton’s supportive force from the fundamentals is limited. Although the cotton market is stable temporarily, the weak demand will still drag the cotton market down. Therefore, the market is expected to be in consolidation to avoid any risks.

Downstream yarn market turned better this week and some of the products showed optimistic tendency in sales. Leading quotations of full cotton yarn kept steady. At present, 32s full cotton yarn is quoted 25300-25700 Yuan. 40s full cotton yarn is quoted 25900-28500 Yuan. The trading atmosphere is still weak and the pressure of capital and storage is strong. The rayon price slightly increased this week and the shipment got smoother compared with previous times. Now Xiao Shan-origin 30s weaving yarn is quoted 23000 Yuan and the knitting yarn is 24500 Yuan in the market. The temporary steadiness of cotton market this week gave support for the downstream yarn market to some extent. As the non-interest factors gather in macro-environment at home and abroad, the pressure of textile industry get severe. Hence, from a comprehensive view of point, the yarn market will keep steady in a short term, but it is not very optimistic for a long run.