Commodity markets are weak and volatile

In the United States cotton growth index deviation slightly improved, as well as the external Palestinian-Israeli conflict escalation and the Federal Reserve rate hike expectations to increase the bearish impact, ICE cotton trend weak, yesterday the main minimum fell to 85.20 cents/pound, although the United States cotton and India cotton production is expected to reduce, but in the current external macro atmosphere is not good environment, the recovery of overseas demand may be dragged down. At present, the ongoing conflict between Russia and Ukraine, the superimposed conflict between Palestine and Israel, and the intensifying regional contradictions also constitute obstacles to the global economic recovery to a large extent, and bring resistance to the foreign market.

At the same time, the Palestinian-Israeli conflict may have multiple short - and medium-term impacts on the global economy and long-term impacts on the regional economy. In the short and medium term, its influence channels mainly lie in oil and gas prices and Suez Canal waterway, pushing up oil and gas prices, and then affecting the monetary policies of major economies, foreign exchange markets and capital markets.

In the long run, by disrupting the process of normalizing relations between Saudi Arabia and Israel, the conflict will force Arab countries to continue to devote considerable resources to the Palestinian cause rather than their own economic development, thus delaying the transformation and upgrading of Arab oil exporting countries to non-oil and gas industries. The result is a relative decline in the share of Arab oil and gas exporters in the regional and global economic system, which ultimately affects the price of crude oil.

In addition, the performance of the domestic real estate market is sluggish, the deep-seated problems of the economy still exist, and the situation of poor expectations and insufficient demand is difficult to fundamentally reverse in the short term. In the context of weak overall expectations, the overall trend of commodity markets after the holiday is not good. The internal and external demand situation of the overall downstream cotton textile market is not optimistic, and it is difficult to reproduce the "strong expectations" market that continued to appear in the early part of this year.

Downstream orders have yet to pick up

After the festival, due to the downstream traders began to sharply cut prices to sell inventory, weaving enterprises started to maintain a low level, insufficient demand for replenishment, resulting in textile enterprises since the holiday yarn prices continued to maintain stability or a small decline, in the short term rising expectations are also facing disappointment. At present, textile enterprises generally feedback the sales of finished products is not smooth, the downstream market inquiry is not positive, although most enterprises have not significantly reduced the price of yarn, but the sales pressure has risen, some large and medium-sized textile enterprises finished products inventory has also increased trend, "silver ten" has been nearly half, the market is slightly dim.

The downstream peak season is not flourishing characteristics are significant, yarn traders inventory is high, so that cotton prices face greater resistance. At present, textile enterprises have accumulated inventory and continued to lose production. Gold nine silver ten has been more than half, the negative feedback of the downstream industry has clouded the market.

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