Domestic cotton futures have been consolidating around 21,500 yuan/ton for more than a month. For investors, it is really uncomfortable to see this market situation, and there are no investment opportunities. And the ginners that purchased seed cotton at high prices have been unable to wait for hedging opportunities. . For textile workers, since the raw material prices cannot be smoothly transmitted to the downstream, life is difficult to live between high raw material costs and sluggish demand.
Viscose staple fiber has ushered in a golden era this year after the National Day holiday. The price of more than 14,000 yuan/ton in late October brought a happy moment to the market. After entering November, as downstream demand weakened significantly, viscose staple fiber gradually fell back. However, in the context of high cotton prices and as the price difference between cotton and viscose expanded, viscose staple fiber still had a strong willingness to raise prices.
In this case, the game between upstream raw materials and cotton textile enterprises, cotton textile enterprises and downstream terminal markets is inevitable.
Game 1
Ginner Hedging and Cotton Futures
Since the beginning of this year, the price of the main cotton futures contract 2201 has risen sharply. The skyrocketing price of cotton futures originated from the expectation of a rush to harvest new cotton. The sharp increase in planting costs this year and the expectation of a reduction in new cotton production have made the purchase price of seed cotton significantly higher than last year. In the ginning factory, In the war to grab cotton, Zheng cotton has been rising steadily, only one step away from 23,000 yuan/ton.
At present, the market price of Zheng cotton is still at a discount to the spot price. Based on the current purchase price of seed cotton, which is equivalent to the cost price of lint cotton, the mainstream cost price of cotton in northern Xinjiang is around 24,500 yuan/ton, and that of cotton in southern Xinjiang is around 23,500 yuan/ton. The processing resources are serious. Ginners trapped in a prisoner’s dilemma under the imbalance situation have hoarded a large amount of high-priced cotton, eagerly anticipating a surge in cotton futures to meet their hedging needs.
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