Market Analysis: The Total Cotton Inventory Continues To Grow Slowly

Since late September, the total cotton inventory of China's main ports has continued a slow growth trend. Although the arrival and warehousing of American cotton and Brazilian cotton have declined, the growth of Australian cotton (including 2023/24 and 2022/23) and cotton warehousing from other origins offset the decline of American cotton and Brazilian cotton.

According to the industry analysis, on the one hand, with the recent major contracts of ICE cotton breaking 72 cents/pound, 74 cents/pound and Zheng Mian CF2501 breaking 14000 yuan/ton and 14500 yuan/ton, domestic cotton enterprises' inquiry and purchase of foreign cotton "hit the brakes" to varying degrees; On the other hand, although the 200000 ton sliding tariff cotton import quota was successively issued to textile enterprises in the middle of September, factors such as small quantity, limited processing trade import, and unclear extension of internal and external cotton prices under sliding tariff led textile enterprises to wait and see. Therefore, "less warehousing and less outbound" has increased the total cotton inventory at the port.

From the quotation of some international cotton merchants and trade enterprises, the net weight quotation of bonded M1-1/8 (Qiangli 28GPT, horse value 3.5-4.9) in Qingdao and Zhangjiagang on September 28-29 was concentrated at 80.77-81.77 cents/pound, and the direct import cost under 1% tariff and sliding standard tariff was 14180-14355 yuan/ton and 14730-14855 yuan/ton respectively; The net weight quotation of bonded American cotton 31-336 (28-30GPT) is 82.77-85.27 cents/pound, and the direct import cost under 1% tariff and sliding standard tariff is 14525-14955 yuan/ton and 14980-15280 yuan/ton respectively.

At present, the "Double 28/Double 29" Xinjiang machine-made cotton is priced at 15100-15300 yuan/ton in Henan, Shandong, Jiangsu and Zhejiang and other mainland warehouses (the difference between cotton enterprises' prices is large). Considering the difference in net weight and public weight settlement, the port Brazilian cotton and domestic cotton are priced at 1000-1300 yuan/ton under 1% tariff at the end of September; Under the sliding standard tariff, the price difference between Brazilian cotton and domestic cotton at the port is 450-750 yuan/ton, which is larger than that in the first half of September, and the price competitiveness of foreign cotton has recovered.