Textile Enterprises: Low Price Preparation To Deal With The Break Period

Recently, textile enterprises have been purchasing large quantities of cotton that is in line with production at a low price. Most of the stocks have been raised from 20 days in advance to 40 days, so as to prevent 7 - 9 of the risk of the shortage of new flowers.

The mainland and the mainland

The hand picked cotton was almost sold out and the rest was mostly Corps.

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Taking into account the late quality of cotton less and less, will be in the near future a large number of procurement, ahead of stock.

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In recent years, cotton yields have continued to decrease, labor costs have increased, and cotton planting areas in the mainland have continued to decrease. Xinjiang has also cut down more than 10% of its area under the task of reducing the planting area.

Cotton planting area has dropped sharply this year, with a drop of about 20% and output has also declined.

In the next year, the national output is estimated to be between 5 million 200 thousand and 5 million 500 thousand tons, and there is no possibility of a larger supply gap in the next year.

The difference between inside and outside cotton prices has narrowed, and textile enterprises have improved.

The difference between domestic and foreign cotton prices is narrowed, and the impact strength of imported yarns is weakened.

Although the products of large textile enterprises are not substitutable with foreign products, the low price of raw materials also reduces the cost of production.

At the same time, the price difference between cotton and alternative raw materials has been shrinking, which has also increased the amount of cotton used by some non cotton textile enterprises.

Cotton prices are rising.

First, it is not only the reduction of cotton planting area in China, but the cotton planting area of the United States and India is also in a decline state.

Second, last year, the domestic cotton market has reached the largest inventory in history. From next year, the new inventory cycle will start.

Third, next year, the government may continue to impose strict control over import quotas to match the sale of State Cotton stores.

Fourthly, the profits of downstream textile enterprises are resumed, and SMEs have more chips to compete with foreign enterprises.

Under the combined effect of the above factors, the general direction of cotton market is upward.

However, the selling pressure of national cotton can not be ignored. In the later stage, cotton prices will resonate with the selling price, showing a ladder like trend, and the center of operation will gradually increase.

In terms of futures contract operation, we can gradually arrange more than 1601 and 1605 contracts in the long term.

1509 the contract is subject to the selling pressure of the national cotton store. If it is sold in the range of 13000 yuan to 13500 yuan / ton, the price of the 1509 contract can hardly rise sharply.

However, the cost of its bottom support is more obvious, before entering the month of delivery, prices are not likely to fall sharply.

Arbitrage, the central line can try to throw 1509 contracts to buy 1601 contract reverse operation. With the differentiation of the two contracts, the price difference between the two parties is expected to further expand.