Replenishment Of Cotton Market Actively Pushes Up Spot Price

Before the rise in cotton prices, we found that the three price differentials closely related to cotton demand were beneficial to raising cotton demand, but the recent rise led to the gradual disappearance of these factors.

Judging from the difference between domestic and foreign cotton prices, due to the recent increase in cotton prices, the current domestic and foreign cotton prices are still low.

However, due to the sharp rise in the futures market and the reversal of the current price differential, futures prices are now nearly 700 yuan / tonne higher than the import price of cotton imports.

Besides,

The price difference between polyester staple fiber and viscose staple fiber has changed greatly in recent years.

For example, the price difference between polyester staple and the polyester staple fiber was expanded from 4700 yuan to 5400 yuan at present, and the price difference between viscose staple fiber and viscose staple fiber was reduced from 2000 yuan to 1300 yuan.

If the futures price is calculated, the change will be greater.

Under such circumstances, the demand for cotton brought about by comparative advantage may be restricted by the rapid upward movement of prices.

Domestic textile enterprises have developed the habit of low inventory operation in the production and operation in recent years. In anticipation of the national reservoir being about to be sold, they are further lowering their inventories, and generally keep the cotton stocks in less than 1 months, or even 3 weeks.

Therefore, since the beginning of April, replenishment has led to a rise in the spot market.

Up to now, spot cotton on the market has risen by 800 yuan / ton compared with the end of March.

This year, the National Reserve will throw about 2 million tons of cotton reserves, which can effectively meet cotton.

Tense situation.

But from the details of the policy of storage and storage, it is actually concealed.

First, the timing of the policy of dumping and storage is much slower than market expectations.

The national dumping date was postponed to the beginning of May, a month late than market expectations.

This means that the spot market has more than one month to consume new cotton and reduce effective supply.

Secondly, imported cotton will be the main source of dumping.

Because

The quality of cotton is not directly competitive with the mainstream cotton in the spot market this year, but it can not suppress the market.

If the sale time of imported cotton is kept for one month, it means that this year's new flower has been more than one month without competition, and is also conducive to new flower inventory.

Finally, this year, the reserve price will be determined by the weighted adjustment of the international and domestic spot price index, which is a fluctuating price and will fluctuate along with the fluctuation of the market.

At first, the market interpreted the policy with bad profits. It believed that it would lead to a spiral downward trend in the selling price.

But now the market is aware that there may be a spiral upward trend in the price of reserves.

On the contrary, if the country sets a fixed price dumping reserve, it will set a ceiling for the price of the spot market, which will limit the price rise.

The rapid rise in the early stage is a reflection of the tight spot market and the good policy of reserve and reserve, but the excessive rise also overdraws future expectations.

On the one hand, due to the rise in cotton prices, the relative value of domestic futures cotton will be reduced, which will lead to a decline in demand.

On the other hand, in May 3rd, the national reserve is about to start dumping, which will effectively ease the tension in the spot market and suppress the fanaticism of the futures market.

On the whole, I believe that the pressure of cotton callback in the near future is increasing, but in the long run, cotton production will decrease this year, and the control of imported cotton and the extrusion of imported cotton yarn will make cotton prices relatively strong in the later stage.