The Phenomenon Of "Stampede" Appears To Be Unpredictable.

When considering price movements and risk aversion problems, enterprises are easily influenced by their own environment, and their operation strategies are limited. Futures Company and its subsidiaries can better start from the macro overall situation and grasp the cycle of the industry chain, find price inflection points in time, prompt risks, and better service industries customers to realize the protection and asset allocation.

The cotton industry chain is "soft", and the price of each layer is "unable to pull". It comes down to the imbalance between supply and demand. Compared with the international market, domestic lint and cotton yarn prices have been high for many years, making the world's cotton flow to China. Domestically, although the sale of cotton in the mainland is over 85%, the supply of Xinjiang cotton is still abundant. In addition, three years of storage and storage, domestic cotton supply far exceeds demand.

From Shandong to Hebei, the futures Daily reporter visited Yucheng cotton and hemp Co., Ltd., Binzhou China Textile Yintai Industrial Co., Ltd., Hengshui cotton and hemp company and Jizhou Hengtong cotton storage Co., Ltd. In the warehouse of these companies, cotton has been piled up close to the roof. Even the open space outside the warehouse is stacked with a pile of lint covering the rain cloth.

Some traders said they also had large inventories in their hands. In order to promote sales, traders will drop prices once again, and there is no profit margin at present.

Market participants predict that it is imperative to sell national reserves. The State Reserve has about 11 million tons of cotton, which has been sold for at least 3 to 5 years. In the period of centralized listing of domestic cotton and imported cotton, cotton has been overloaded and prices have been stampede, and the entire industrial chain has been impacted.

At present, the cotton and cotton yarn prices remain optimistic about the number of manufacturers is very small. Textile enterprises tend to maintain low inventories, while purchasing strategies are mainly used with mining, and the expected centralized replenishment does not appear.

Demand side, Lu Xian futures cotton business division Fan Zhongxing told futures Daily reporters that the inventory of grey cloth and clothing remained high, and terminal consumption did not recover, suppressing the confidence of textile enterprises in preparing for storage. In addition, it is worth noting that the function of cotton cloth has been replaced by subversive substitution. The textile industry originally stepped back as the mainstream cotton spinning, with more high-grade animal fibers and lower chemical fibers. Under the circumstances of the increasing expansion of the upper and lower two parties, the market demand for pure cotton is estimated to be less than 20%.

Although domestic cotton production is expected to decrease in the new year, Spin Downstream consumption is not strong, finished product inventory is high, in the short term will still suppress cotton prices. Fan Zhongxing said that when the downstream fabric and garments were to be stocking up, cotton would be finished. Price Will usher in a turning point.

Li Junfeng, a British cotton futures researcher, believes that in the long run, cotton prices need not be too pessimistic. In terms of state reserves, the NDRC officials have stated on many occasions that the sale of State Cotton stores is not to suppress the market, nor to cause huge fluctuations in the market. At present, the basic sales of real estate cotton have been completed, and the sales progress of Xinjiang's machine picked cotton is slow. Cotton demand has not improved. Futures and spot markets are all weak.

"In addition, when forecasting the cotton production in the new year, all institutions basically use cotton planting area as a reference index, ignoring the special situation that the cotton yield per unit area in China has reached a record high in 2014/2015." Li Junfeng reminded that the cotton production per unit area in the new year has remained relatively uncertain last year, and the reduction of cotton planting area is already a foregone conclusion. At the same time, the decline in yield may make the total cotton output in the new year fall more than expected.

At the same time, the country began to Imported cotton The restrictions will enable textile enterprises to improve their enthusiasm for picking cotton by hand. But with the domestic high quality cotton consumption and the fact that they can not get enough imported cotton and hand picked cotton, textile enterprises will have to increase their demand for machine picked cotton. Moreover, with the narrowing of the internal and external cotton prices, the impact of imported yarns on the domestic market has gradually weakened, which will play a supporting role in cotton prices in the future.

It is worth noting that in the current situation of cotton prices being sluggish, enterprises have strong desire to generate warehouse receipts. A number of ginning plants said that if the current base reached a certain level, they would consider selling cotton with futures warehouse receipts. Liu Yuntong, deputy general manager of xingwanfu Group Co., Ltd., a financial asset management platform, believes that the enterprises in the cotton industry chain are concerned about the futures market, indicating that they have a sense of enterprise crisis. This is a good opportunity for Futures Company and information management companies to serve their customers.