more mills entered Xinjiang to procure new cotton

During the week from Nov 4-8, purchasing volumes of mills improved somewhat compared to the prior week. According to ginners and mills, more mills entered Xinjiang to procure new cotton, and sales increased somewhat. But mills only operated safe accumulation, and had no plan to purchase much. A few large mills increased the feedstock inventory from 45 days to 90 days, while most mills only last the feedstock inventory at 15-30 days. Some mills even stopped purchasing after cotton prices moved up. In general, mills lack confidence towards late market, and downstream grey fabric market has shown signs of weakness, so cotton yarn sales are restricted, and mills show lower buying indication.

According to current ginning and inspection progress, ginning volumes of new cotton are about 3.62% lower than the corresponding period of last year, and inspection volumes decline by 5.02%. The data shows not large output reduction. For spot cotton, some ginners say that about one third and a half of new cotton has been procured by traders and large mills. Meanwhile, due to strong upward trend of ZCE cotton futures previously, some on-call cotton at traders’ hand is locked. Therefore, the available supply of new cotton reduces in short. However, mills lack confidence towards late market, and show no high buying interests. For the feedstock replenishment before the Spring Festival holiday, many mills say that they will reduce the purchasing volumes.