Xinjiang: The spot market picks up and high-quality cotton becomes the focus of the game
Correspondent from China Cotton Network: According to reports from some cotton companies in Xinjiang, 2From the end of the month to3The main force of Zheng Mian at the beginning of the month Contracts continue to fluctuate and rise, and most mainland traders and fabric factories have stopped inquiring and purchasing3128/2129grade, 3129/2129 grade Xinjiang cotton, lint is in a state of unsaleable status.
As the night trading price of Zheng cotton fell below 15,800 yuan/ton on March 8, some large cotton operating companies became active again, and quotations and transactions showed signs of slow recovery. On the one hand, some cotton companies heavily hedged in the CF1705 contract. The futures plummeted but the spot price stabilized. There was a significant increase in arbitrage trading operations (short orders, spot sales), especially the medium and low quality products with a length of 28mm, horse value C2, and breaking strength of 27CN. The quantity of lint cotton is rising rapidly; on the other hand, on March 6-7, the transaction price of reserve cotton was higher than the expectations of some cotton companies. If other hidden costs are included, it is the same as or even slightly higher than the spot price of Xinjiang cotton in 2016/17. . Some small and medium-sized textile companies have temporarily chosen to wait and see, but in order to maintain production they can only inquire and purchase new cotton.
Judging from the survey, traders currently lower their purchasing standards to “length 28mm, breaking strength 27CN and above”, and there are almost no requirements for horse value (not C1). However, cotton finishing companies do not buy it. Not only are there few quotes for “double 28/double 29”, but the official quotation for 3128/2128 grade hand-picked cotton with a breaking strength of 27.5CN and above is generally above 16,500 yuan/ton.
The highest transaction prices of reserve cotton in the first two trading days were 16,380 yuan/ton and 16,500 yuan/ton (official) respectively, which is equivalent to 3128 standard grade prices reaching 16,640 yuan/ton and 16,449 yuan/ton (official) ), and the proportion of real estate cotton is close to 50%. The transaction price of reserve cotton has particularly strong support for the spot and listed sales of Xinjiang cotton. The mentality of a few cotton companies to “aim too high” appears. Cotton companies, traders and fabric mills are increasingly concerned about the quality of cotton reserves. The difference between high and low transaction prices in the first two auction trading days reached 1,860 yuan/ton and 2,100 yuan/ton respectively, indicating that there are too many high-quality cotton resources on the market and the bidding is fierce. The CF1705 contract exceeded 16,300 yuan/ton, and cotton companies and traders were actively hedging, and high-quality cotton that was in line with the generation of futures warehouse receipts entered the transportation and delivery rhythm (as of March 7, the number of Zheng cotton warehouse receipts was 2,204, and the number of valid warehouse receipts was 2,145) , the number of high-quality resources available for circulation in the market continues to decrease. (
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