The weak demand from the downstream textile industry was one of the main reasons for the sharp drop in cotton and PTA in the first half of the year.
In the upcoming traditional peak season, there will be a peak season for downstream demand, which may drive cotton and PTA prices upward. The market also has doubts.
Although the volume of cloth in China Textile City has indeed increased, it is not large, and it is not enough to pull upstream raw materials.
Moreover, in the case of high cotton production this year, China Cotton Reserve Bank introduced a policy of open acquisition of 19,800 yuan/ton. The market believes that this policy is equivalent to limiting the spot price of cotton to fluctuate within the range of 19,800±500 yuan/ton.
Because cotton and chemical fiber are alternatives to each other, the price of cotton is not a surprise, and it will inevitably limit the fluctuation range of chemical fiber prices, thus limiting the upside of PTA prices.
In the upcoming traditional peak season, there will be a peak season for downstream demand, which may drive cotton and PTA prices upward. The market also has doubts.
Although the volume of cloth in China Textile City has indeed increased, it is not large, and it is not enough to pull upstream raw materials.
Moreover, in the case of high cotton production this year, China Cotton Reserve Bank introduced a policy of open acquisition of 19,800 yuan/ton. The market believes that this policy is equivalent to limiting the spot price of cotton to fluctuate within the range of 19,800±500 yuan/ton.
Because cotton and chemical fiber are alternatives to each other, the price of cotton is not a surprise, and it will inevitably limit the fluctuation range of chemical fiber prices, thus limiting the upside of PTA prices.
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