Round Out Rules Conform To The Intention Of Spinning Enterprises

The announcement of the relevant arrangements for the national cotton reserve clearly indicates that the time of the national cotton storage rotation in 2015/2016 is 31 days on May 3rd ~8, and the total output does not exceed 2 million tons. The reserve cotton is organized by the China Fiber Inspection Bureau to conduct a comprehensive notarization of quality and weight (Bao Baojian).

The two principles of "multiple rounds, fewer rounds" and "priority of cotton production outside the country, and long storage time" are also in line with the expectations of all parties.

Some people in the industry use "stable, accurate and ruthless" to describe the national cotton store's rotation. In particular, the price of the round trip is bundled with the CotlookA (real ICE futures index) and adjusted once a week, so as to realize the linkage, linkage and integration of cotton prices inside and outside the country, which is conducive to maintaining the stability of cotton prices, improving the competitiveness of cotton textile exports and the marketization of China's cotton industry.

This round of reserve cotton will reinspect the quality and weight comprehensively, quality package inspection, weight batches inspection, and market speculation completely coincide, which also improved the enthusiasm of textile enterprises to buy cotton reserves.

In addition, the rules specify that priority will be given to the rotation of imported cotton.

That is to say, textile cotton enterprises can purchase high-quality cotton from national cotton stores.

Wang Quanfa, chairman of Henan Yongan Textile Co., Ltd., said that since the announcement of the cotton spinning wheel, the enterprise has always maintained a low cotton stock. The reserve cotton wheel rules have been promulgated and the price has been in line with the market. This is a great improvement compared with the previous ones, so long as there is cotton that meets the requirements of the quality of the enterprise, the enterprise will buy it.

The reporter understands that most enterprises tend to buy good quality products.

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In this regard, Li Zhenhua, a senior cotton analyst at Huarui information and information company, said that according to the current market consumption situation, it is estimated that in addition to some cotton with better quality indicators, the competition of other national cotton stores will not be too intense at auction, and the actual paction price is limited.

Unless the domestic production of conventional yarn spinning enterprises recoveries a lot, the start-up rate will increase and thus bring about substantial growth in raw material demand, but this needs a process.

In recent years, the price of cotton reserves has gradually declined.

Especially in 2015, the domestic base price of cotton wheels has dropped to 13200 yuan / ton.

In 2016, due to

Based on domestic and international cotton prices, the reserve price will be further lowered.

However, under the expectation of lower price, the market is running counter to it. Both the cotton futures market and the spot market respond to the attitude of price rise.

In the face of the soaring price of futures and spot cotton, the NDRC responded positively, making clear that the state reserve cotton stock is sufficient, if the market needs, the amount of cotton reserves and the number of daily listing can be increased at any time.

China Cotton Textile Industry Association also announced that

We should rationally view the rise in cotton prices. From the actual paction situation, the price of pure cotton yarn has not been improved, and some of the colored spinning products are on the decline, and the order and price of non cotton yarn are basically stable.

This shows that the rising price of the current cotton futures is not caused by the demand pull in the downstream market.

The pattern of supply and demand has not changed significantly, reflecting the fact that downstream weaving and knitting enterprises do not accept price increases, and lack of upward momentum.

Since the announcement of the reserve cotton rotation policy in April 15th, the first day of the opening of the cotton futures market, in April 18th, Zheng Mian futures prices responded to the price limit. The price of ICE cotton main contract was also rising, rising 3.68% to 62.23 cents / pound, the biggest one-day gain in 8 months.

The spot market of cotton also showed a large increase in quotations. Some traders raised their quotas by 300 yuan / ton, while others simply "hoarding" and stopped offering quotations.

Analysis of the industry, because in the process of cotton prices fell before, inventory means loss, so many enterprises are very low inventory, and this round of rising cotton prices, textile enterprises replenishment demand is only a small part, more because of the operation of futures market funds.