Recently, the main CF2009 contract of Zheng cotton futures has remained floating around 12,000 yuan/ton, and the spot price has gradually stabilized after experiencing a short-term rise. At present, for all parties in the cotton market, some are really happy, some are worried, and the performance of all parties is different.
First of all, rising cotton prices are undoubtedly long-lost good news for cotton production companies. Recently, some ginners have finally gotten rid of their burdens and are actively selling the remaining cotton processed this year. Since the price of cotton fell sharply after the Spring Festival, many ginning companies had not had time to sell the cotton, and the market price fell to the “floor price”. The cost and selling price were seriously inverted, and shipments meant losses, causing some companies to lose money. The sale schedule has been postponed. After continuing to rise in the early stage, cotton prices have finally stabilized in the range of 12,500-12,700 yuan/ton (the delivery price of cotton in Shandong, Xinjiang, and Xinjiang). This price has just covered the processing costs. Therefore, this provides a great opportunity for cotton production companies to sell.
Secondly, for cotton yarn companies, as cotton prices rise, spinning costs will increase accordingly. However, it is currently in the traditional textile off-season and gauze consumption is limited. Therefore, when cotton yarn prices are difficult to rise, company production Profits are squeezed. Therefore, it is not a good thing for textile companies if raw materials increase but products do not. Fortunately, cotton prices have stabilized recently, which has temporarily reduced the impact on textile companies, and also won favorable time for textile companies to digest inventory in a timely manner and steadily receive new orders.
Furthermore, some futures and spot trading companies have taken advantage of the current relatively stable operating environment to distribute inventory in a timely manner and return funds. Some companies are even preparing to purchase spot goods again to register warehouse receipts and do hedging arbitrage without exposure. According to feedback from some cotton supervision warehouses in Xinjiang, lint cotton shipments have increased recently, and some companies plan to move lint cotton to the mainland for registration. In particular, the recent stabilization and fluctuation of cotton prices in Zhengzhou provides an excellent opportunity for cargo owners. In the past, there were often situations where cotton prices fluctuated frequently and shipments were not timely, resulting in lost opportunities to register warehouse receipts.
Although the impact of rising cotton prices on all parties in the market is different, relatively stable prices in the short term will ease the conflicts between upstream and downstream to a certain extent, and will also be conducive to the purchase and sale of cotton by buyers and sellers. Therefore, it is recommended that relevant companies seize the time to destock and find orders, which is the current top priority. </p
