As of October 27, the cumulative cotton processing volume in Xinjiang has reached 1.25 million tons. As the number of seed cotton purchased by ginning companies increases, the total lint processing volume has also steadily increased. However, from the perspective of spot transactions in the market, the willingness of supply-side ginning companies to negotiate with demand-side textile companies is low, and spot transactions are basically at a standstill. Since most of the country’s textile production capacity is concentrated in inland areas such as Shandong, Jiangsu, and Henan, in previous years new cotton came on the market and shipments to Xinjiang would gradually increase, but this year there has been no improvement.
According to some relevant companies, there are many factors why cotton exports to Xinjiang are unusually deserted this year: First, it is difficult for downstream textile companies to accept high prices in a short period of time. New cotton, and the back-end production and sales are not prosperous, lacking driving force; secondly, most ginning companies have not yet determined the shipping price, and have a strong mentality of reluctance to sell and wait for an increase, making it difficult for the industry to define a relatively “reasonable” market quotation; thirdly, Global energy is tense, gasoline and diesel prices are rising, freight rates out of Xinjiang are rising sharply, and the cost of moving warehouses to the mainland is rising, which has also inhibited the purchasing enthusiasm of some mainland companies; fourth, the spot price of lint cotton is 2,000-3,000 yuan/ton with the CF2201 contract, the main force of Zheng Cotton. Hedging registered warehouse receipts cannot be carried out smoothly, which inhibits the shipment of lint cotton to the mainland (in the same period in previous years, many companies moved lint cotton to the mainland for delivery of registered warehouse receipts); Fifth, the COVID-19 epidemic prevention and control situation has recently escalated in many places, and the inspection process of logistics vehicles to and from Xinjiang and outside Xinjiang The increase in transportation vehicles has also brought certain resistance to the export of cotton from Xinjiang.
According to estimates by some logistics companies, Xinjiang cotton shipments in October this year may drop by 50%-60% compared with the same period last year. Currently, upstream companies are holding goods at a cost. Selling, while the downstream is replenishing cotton raw materials with sales and fixed production. The differences between the two parties on the price cannot be resolved for the time being, and it is also the most prominent factor affecting the shipment transaction. Some companies also said that the power restriction requirements of some textile companies in the mainland have been relaxed recently, and the company’s startup rate has rebounded. If Xinjiang cotton is purchased intensively in the future, the lint shipment situation will improve.
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