Fabric Products,Fabric Information,Fabric Factories,Fabric Suppliers Fabric News A brief discussion on the relationship between cotton price rise and fall and delivery and storage

A brief discussion on the relationship between cotton price rise and fall and delivery and storage



On January 15, the reserve cotton rotation was finally completed after a hiatus of more than half a month. This transaction was closely related to the sharp correction in cotton prices. Looking back more than h…

On January 15, the reserve cotton rotation was finally completed after a hiatus of more than half a month. This transaction was closely related to the sharp correction in cotton prices. Looking back more than half a month ago, cotton prices fluctuated upwards, the market was bullish, and traders and processing companies had low willingness to deposit, resulting in a temporary suspension of the transaction process.

According to traders, before China and the United States signed the first-phase agreement, the market had a strong bullish sentiment, and domestic and foreign spot prices were rising in resonance. Affected by this, the maximum price of cotton reserves has increased, with an increase of as much as 238 yuan/ton in just one week. During the period of rising cotton prices, the common responses received from textile enterprises were either that the quotations had increased significantly or that the lint cotton of this quality had been sold out. It became the norm for traders to wait and see at that time.

After China and the United States signed the first phase agreement, because the content of the agreement was lower than market expectations, cotton prices fell sharply. In just two or three days, the CF2005 contract fell from a high of 14,450 yuan/ton to 13,890 yuan/ton. tons of low. According to the current market trend, if the strong support of 14,000 yuan/ton is broken through, the magnitude of this round of cotton price correction will continue to increase.

What is certain is that if the market cotton price continues to fall, the reserve cotton rounds will continue to be traded. On the contrary, there will be zero transactions. Among them, traders mainly consider the issue of profit. In a rising market, both spot quotations and point prices will rise. Although the price of reserve cotton has also increased, the cost-effectiveness of storage is not as high as direct sales of spot and hedging profits. Of course, in the process of market decline, when spot sales in the market encounter obstacles and hedging transactions cannot be completed, deposits have become one of the few effective means for companies to reduce risks and withdraw funds.

According to a certain delivery enterprise, in addition to price factors, factors such as cotton quality, index premiums and discounts, and transportation are also factors that affect the enthusiasm of enterprises for delivery. Therefore, when prices rise, companies are less willing to deposit funds. When prices fall, even if they encounter quality and other related problems, companies will try to deposit funds in order to reduce risks and secure funds. </p

This article is from the Internet, does not represent Composite Fabric,bonded Fabric,Lamination Fabric position, reproduced please specify the source.https://www.tradetextile.com/archives/38548

Author: clsrich

 
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