Views:3 Author:Site Editor Publish Time: 2020-03-31 Origin:Site
3. Status quo of traders and mills
Traders: most traders revise up the basis of on-call cotton due to lower ZCE cotton futures, while some traders with high basis move lower the basis to speed up the sales. Under the continual fall of ZCE cotton futures, most traders have revised up the basis by 50-150yuan/mt last week. The mainstream offers of 2019/20 grade-3128 cotton are pegged at 500-800yuan/mt premium to ZCE May contract. From the angle of inventory at traders’ hand, cotton inventory at large traders’ hand is mostly at 200-250kt, that at medium-sized traders at 10-20kt, that at small traders at 2,000-4000 tons. On-call cotton sales were relatively good last week, easing the anxious mindset, but some small traders are still worrying about the downstream demand, and move lower the basis by 100yuan/mt this week to speed up the sales.
Mills: mills are in slow recovery, and yarn prices keep flat. New orders are limited, as buyers stand on the sidelines mostly. Resumption of mills is relatively good, but production has not recovered effectively. Most mills purchase cotton on need-to-basis, and on concern about the limited new orders, with relatively ample cotton inventory, most mills remain cautious.