Market Analysis: What Factors Should Textile Enterprises Pay Attention To That Affect The Internal Market Trend

At the end of April, the cotton planting in Xinjiang in 2025 is drawing to a close, and the view that the overall planting area will increase slightly has gradually reached a consensus. The weather disturbance factors from the spring sowing period have significantly weakened. The focus of organizations, cotton related enterprises, and speculators is on the changes in the global tariff information, the adjustment of China's domestic cotton supply and demand in 2025 Policies to boost consumption accelerated landing and fluctuations in peripheral commodity futures and other factors.

With the recent trading days, ICE The strong resistance level of 70 cents/pound of cotton futures contract in July ended in failure. In addition, before May Day, the risk aversion of funds was warming up and the textile industry would enter the traditional slack season. New orders of enterprises weakened. Some production enterprises worried about the sustainability of future orders and the rising pressure of subsequent operations. Zheng Mian's September contract retreated after a short stop at 13000 yuan/ton, The long and short sides are playing games again at 12500-13000 yuan/ton box.

In May, what factors should all parties pay attention to that affect the internal market trend?

First, when to start tariff negotiations between China and the United States, and how long to reach a new round of trade agreement is the key. Recently, the Trump government has been releasing false information and "opening up" to Wal Mart, Target, Home Depot and other American retailers, which means that the United States is eager to negotiate with China on tariff issues. The spokesman of the Foreign Ministry said that recent reports from the US that China and the US are negotiating, or even will reach an agreement, are false news. China and the United States did not consult or negotiate on the tariff issue.

Secondly, the impact of strictly controlling "entrepot trade" on China's cotton consumption cannot be underestimated. In order to cooperate with the U.S. government, Vietnam, Mexico, South Korea, Singapore, Malaysia and other countries have recently strictly controlled "entrepot trade". The impact of China's cotton textile and cotton garment bypass on the export of the United States, the European Union and other markets may be difficult to estimate, and the negative effect may be greater than that of the United States directly imposing tariffs. Therefore, it is necessary to pay attention to the specific measures taken by countries to "entrepot trade" and find ways and means to avoid it.

Third, the United States' tariff adjustment on small cross-border commodities may lead other countries to follow suit. The US government will cancel the T86 tariff policy on May 2 (Vietnam, Brazil and other countries have implemented tariff exemption for small cross-border goods), while the EU plans to cancel the 150 euro tax exemption threshold, and the UK plans to cancel the 135 pound tax exemption threshold. Once this "domino effect" is formed, it will force China's cross-border e-commerce to face the pressure of rising global costs.

Fourth, the resumption of China's export of cotton products to the United States may require "time for space". If the US government signs new tariff agreements with Vietnam, India, Bangladesh, Pakistan and other Southeast Asian countries in the near future, the export of Southeast Asian cotton products to the United States will set off an upsurge, which will quickly occupy the market share of Chinese cotton products. Later, China and the United States signed a new trade agreement, and it may take a long time to restore the traceability orders for American cotton products.

Fifth, focus on the news of the Federal Reserve's interest rate cut in June, the People's Bank of China's interest rate cut and other support policies, which is conducive to the stability and rebound of domestic and foreign financial markets, commodity futures, etc.