Cotton Spot Prices on the Decline in China
As downstream spinners remained conservative and continued to buy raw materials in small quantities, the spot price in China dropped under the pressure.
May 31, 2012
According to China’s National Cotton Market Monitoring System, the harvest and selling of new cotton was completed nationwide on May 25, with the following results:
- 98.9% of the new cotton (sold) had been processed by gins, up 0.6 points year over year (YOY)
- 88.7% of the new cotton (processed, including cotton sold to the reserve system) had been sold, up 20 points YOY
- ginning progress in Xinjiang fresh cotton reached to 99.3%, up 1.1 points YOY
- sales progress was 92.4%, up 12.5 points YOY.
This week, with depressed cotton futures prices in both the Intercontinental Exchange (ICE) and Zhengzhou Commodity Exchange (ZCE) markets, there wasn’t much activity in the spot market in China. As downstream spinners remained conservative and continued to buy raw materials in small quantities, the spot price dropped under the pressure.
On May 25, the CNCotton B Index for average price of standard lint cotton in eastern provinces was $1.56/lb, a drop of 1.5 cents/lb (0.9%) from last week. The figure represents a decrease of 22.3% from this time last year. The average price of standard lint cotton in Xinjiang was $1.60/lb, a decrease of 1.6 cents/lb (1%) from last week. That represents a decrease of 23.7% from this time last year.
The settling price of the ZCE cotton futures contract July 2012 was $1.50/lb, a decrease of 1.7 cents/lb (1.1%) from last week and a drop of 27.8% from last year. The average price of the CNCE (China National Cotton Exchange) E-forward contract for July 2012 was also $1.50/lb, a drop of 0.6% from last week and a decrease of 25.7% from last year.