New Mode: How Do Spot Price Pactions Affect Buyers And Sellers?

Since 2014, large and medium-sized cotton trade enterprises in the mainland and the mainland have made full use of the Zhengzhou cotton futures spot price trading mode between buyers and sellers.

Fixed price pactions are more obvious impact, volume decline is inevitable.

When purchasing, according to Zheng cotton's main contract, traders set the 3128 base price and the base difference. After being recognized by the cotton mill and the cotton enterprise, they become the precondition for the contract to calculate and execute.

For the lint sellers, buyers (buyers) can ask buyers (buyers) to sell them in advance at the main contract of the Zheng cotton (the price of the list is put forward by the seller, and the buyer is only responsible for the price). Usually they hang up once a day (the price fluctuates sharply, and the sellers propose a single order in the morning and afternoon). Once the air contract is concluded, the contract between the buyer and the seller will be immediately generated, and the final paction price of the actual delivery cotton should be calculated according to the basis set by the purchaser.

For traders selling lint, the buyers such as textile mills also adopt the "zhengmian" point price method (the basis and benchmark price set by the authorized traders), and the more than one set of preset price is put forward by the buyer, and the traders will sign the bill (the lowest the price of the paction is for the buyer). Once the seller sells more than one, the spot contract between the two sides will be established.

So what are the effects of spot trading on buyers and sellers?

First, buyers of upstream ginning plants and downstream textile mills have a higher demand for market trend and market fluctuation. If they operate correctly, profits should be significantly higher than fixed price contracts.

Comparatively speaking, under the situation that Zheng cotton and cotton spot are in the ascending channel and centralization, the spot price sale is more advantageous to cotton processing enterprises.

In the case of continued downturns, downstream buyers are more likely to adopt the spot price purchase mode to minimize costs.

However, the point price mode has a strong foresight in the gambling market and gambling judgment. It is necessary to understand the whole industry chain, domestic and foreign market and peripheral factors. Once the price is too high or too low, it is likely to miss the opportunity.

Second, for cotton traders, the income is relatively stable, and there is an opportunity to earn bigger spreads.

From the survey point of view, in recent years, in addition to the purchase and sale of a very small number of cotton enterprises based on the spot price mode, most of them have spot price purchase, but when the Zheng cotton falls sharply, the price of the flat air is reduced to the spot market. In order to achieve the "positive and negative" operation as soon as possible, traders in the flat insurance policy at the same time with a fixed price of less than 100-200 yuan / ton of the market price, the profit is obviously higher than that of the spot price only.

Some enterprises believe that if the price of cotton is strictly controlled, Cotton Traders deduct financial costs and paction fees, and so on, the profits can only be relatively stable.

Third, ON-CALL

It needs comprehensive regulation and promotion.

Compared to the ICE futures ON-CALL mode, the domestic cotton spot trading has just started, there are still many aspects to be rectified and standardized.

International Cotton Traders usually make their own cotton basis and benchmark price according to their own purchasing situation, capital situation and market conditions. The difference between the companies is 100-200 yuan / ton, which is quite common (for horse value, fracture strength, length, quality of rolling mill and so on), the difference between the premium and premium made by various companies is obviously different, the general premium is lower than that of Zheng cotton standard, the discount rate is much higher than that of Zheng cotton standard, and traders can earn more profits; and the ginning plants and cotton enterprises are mostly ON-CALL novice, and are still in the initial stage. The rules and methods formulated by traders need to be studied and adapted. If the system is unified and standardized, it will be a great benefit to the whole cotton and cotton textile industry. Such as cotton traders (inclusive)

The supply of cotton is relatively large this year.

Reserve cotton and imported cotton have more supply to the market. Recently, because of the fall of Zheng cotton prices, the flow of warehouse cotton into the market has been quickening, and spinning enterprises are actively buying warehouse cotton. Because spot cotton has lowered expectations, but the rate is not large, so enterprises are not active in spot purchases.

Downstream consumption side, the arrival of the off-season, downstream textile mill procurement enthusiasm weakened, spinning enterprises orders decline, profit margins narrowed.

The overall supply of cotton is still high, and the volume of warehouse receipts is still at a high level.

It is recommended that every warehouse should be empty, high altitude and low level, and rolling operation.

Zheng cotton fell to the current price, and it is expected that the pullback will continue in the short term.

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