Tag Archives | cotton

China becomes net PTA exporter, whilst cotton prices tumble

China used to be the world’s largest importer of PTA (the raw material for polyester). But not any more. Instead it has become a net exporter for the first time in history: □  Its imports ramped up from 400kt in 1995 to 7 million tonnes in 2006, as Western textile manufacturing moved East □  They […]

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Global cotton markets wait for outcome of China auctions

China’s long-promised cotton auctions have begun this week.  Their outcome will tell us a lot about President Xi Jinping’s ability to force through his New Normal changes in the economy.  It will also, of course, have major impact upon the polyester value chain, given the competition between the 2 fibres. As the slide from the […]

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China’s cotton auction key pointer for global economy outlook

Cotton markets are poised for another testing month in April.  The outcome will also have potentially major implications for the polyester chain – and in turn for commodities markets more generally. The reason is that China has announced that its long-awaited cotton auction will take place in the second half of the month.  Cotton stocks […]

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China’s PTA market moves to self-sufficiency and exports

Credit conditions are tightening day by day in China.  Companies with good payment records over many years are seeing their borrowing limits cut back.  2016 is indeed proving to be the year that President Xi Jinping “takes the pain of restructuring”. At the same time, self-sufficiency has become a key strategy for many industries, in […]

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Further chaos ahead for cotton and polyester markets as China aims to release its cotton stocks

Cotton has been on a roller-coaster ride over the past decade – to record high prices and then partial collapse.  This was followed by China’s decision to build the world’s largest ever cotton inventory as part of its post-2009 stimulus programme, to protect cotton farmers. This inventory, being off the market, means cotton has been […]

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Falling cotton/polyester prices create ‘deflation shock’ for consumers

Cotton prices appear to be collapsing again due to the surpluses created by central bank stimulus policies since 2009.  As the chart shows, these had initially caused prices to soar to levels not seen since the American Civil War: They reached 230c/lb in March 2011, nearly double the post-1982 peak of 117c/lb in May 1995 (blue […]

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Cotton prices suffer worst crash in 55 years

Just as forecast in March, world cotton prices have crashed. Prices peaked at 97.35c/lb on 24 March, just 3 days after the post was published.  Since then, they have fallen by a third to 65c/lb.  They have now fallen for 11 straight weeks – the longest slump in 55 years, according to Bloomberg. There is no need to repeat […]

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Cotton prices slip as US supply rises and China’s imports fall

It seems that cotton prices are about to return to normal levels again.  The blog’s detailed discussion of the issues last September highlighted how current Chinese government policies seemed doomed to fail, at enormous cost to the wider world.  It now looks as though China’s new leadership agrees with this conclusion. Since late 2008, the previous leadership’s […]

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Cotton reserves equal 3 pairs of jeans for every person in the world

Cotton will be one of the main case studies used by future historians to highlight the failure of post-Crisis policies from 2008 onwards.  It highlights all the key issues: Their tidal wave of liquidity took cotton prices, as the chart shows, to all-time record levels. They soared to a record monthly level of 230c/lb in March 2011, nearly double […]

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Commodities supercycle myth enters the end-game

If something seems to be ‘too good to be true’, then it usually is. This may be the learning for the world’s largest pension funds, as they plan their next moves in commodity investment. Their involvement jumped from 2009 after central banks began stimulus programmes, as the blog discussed last month. The funds were looking […]

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