Since mid-December, the market price of Zheng cotton yarn CY2201 contract once exceeded the 27,400 yuan/ton mark, and the inversion range of cotton yarn futures prices has narrowed to 400-600 yuan/ton, which is significantly lower than the inversion range of 1,000-2,000 yuan/ton in November. , but judging from the survey and market positions, the enthusiasm of textile companies and cotton yarn traders to enter the market for hedging is still very low.
Why do textile companies and middlemen not take a cold shoulder even though the current price difference of cotton yarn futures is shrinking rapidly and hedging opportunities are expected to come? Analysis of the reasons: First, based on the current cotton spot price, most textile companies have no profit or a large loss. Regardless of spot sales or hedging of cotton yarn, the loss may exceed 1,500 yuan/ton; second, entering January domestic cotton textile Enterprises generally need to pay for materials (including machine parts), bank loans, wages and water and electricity bills, etc., and the capital flow is very tight. Hedging on futures not only requires a deposit, but also takes a long time for delivery and payment, which cannot alleviate the situation before the Spring Festival. The cash flow pressure of enterprises can only be solved by destocking and withdrawing payment; third, textile enterprises and traders have high expectations for the rebound of cotton yarn spot price difference in the first half of 2022, and are worried about being trapped.
It is understood that some institutions and cotton-related companies have judged that with the introduction of a package of national policies to “stabilize foreign trade, stabilize exchange rates, stabilize financing, and stabilize expectations”, coupled with the large-scale recurrence of the new crown epidemic in some Southeast Asian countries, my country’s textile and apparel industry will Sales are expected to start first, and foreign trade is expected to rebound.
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