CITIC Construction Investment Futures: Cotton demand-driven growth will gradually weaken in May

As the peak textile season comes to an end, the fundamental conditions have not experienced a substantial reversal, and downstream sectors have already shown signs of marginal weakening. Since late April, it has been difficult to raise cotton yarn prices, with cotton prices rising significantly faster than yarn prices, compressing the immediate profits of yarn mills. Some textile companies, worried that end markets may struggle to absorb high-cost yarns, have temporarily halted cotton purchases.
With demand remaining weak and purchasing intentions reduced, some orders from yarn mills are driven by speculative needs from traders, and genuine end-user demand is insufficient to support.
Additionally, considering that May and June are traditionally the off-season for textiles, it is unlikely that new orders will see explosive growth, and demand-driven momentum in May will gradually weaken.
(China Securities Construction Investment Futures)