In the past two days, Zheng Cotton’s main CF2005 contract has reduced its positions and has once again stepped back to the 14,000 yuan/ton support level. Investors’ wait-and-see mentality has increased. After rising for nearly half a month, Zheng Cotton’s slight correction seems to be a matter of course and has not caused market agitation for the time being. Of course, for some cotton-related companies that operate through basis differences, futures prices will fall, the cost-effectiveness of pricing resources will increase, and market competitiveness will also be significantly enhanced. So what is the actual market transaction situation recently?
Compared with previous years, more and more companies are selling lint cotton at fixed prices this year. The fluctuation of Zheng cotton futures prices has an increasing impact on its spot prices. Compared with the past sales at fixed prices, The traditional profit model of cotton-related trading companies obtaining price difference profits by buying low and selling high has gradually withdrawn from the market, while multi-channel profit making such as futures and spot price arbitrage has become the current mainstream purchase and sale method in the cotton market. It is reported that this year, most of the lint cotton in Xinjiang ginneries is also resold to various capital companies and traders in the form of warehouse receipts or price points. Therefore, seizing the periodic shipping opportunities and obtaining timely profits also caters to the operational needs of the industry.
The correction of Zheng cotton in the past two days has once again stimulated the enthusiasm of relevant companies for price selling. Compared with last week, the current quoted price of standard-grade Xinjiang cotton has been adjusted back by 200-400 yuan/ton at the public price, but from the price of pending orders and Judging from the actual transaction situation, this round of price correction of Zheng cotton futures has not stimulated the market’s buying enthusiasm. According to feedback from some cotton merchants, there are mainly the following reasons: First, the Spring Festival holiday is approaching, and downstream spinning mills have more holidays. Pre-holiday stocking has basically come to an end. The number of current market inquiries and inspections has dropped significantly, and purchases and sales have become flat. The general trend is; secondly, the content of the first phase of the Sino-US trade agreement has not yet been clarified, and the market has a strong wait-and-see atmosphere, which also has a great impact on lint cotton transactions; thirdly, export tariffs have dropped, and the downstream recovery is expected to improve. The pre-holiday price correction is limited, and buyers have placed orders Average enthusiasm. Therefore, the recent pullback in cotton prices is actually limited in promoting market buying interest, and the hope of a significant increase in price point trading volume is quite slim.
The Spring Festival holiday is approaching, and the operating rates of the upstream and downstream industries have been steadily declining. The yarn mills have highlighted the holiday atmosphere. Even if some companies have raised their quotations, they still lack substantial trading support. In addition, logistics and transportation have slowed down, and lint cotton transactions have been limited. Obviously, various operations of enterprises before the holiday are gradually entering the final stage. </p
