In the blink of an eye, Zheng cotton has been rising continuously for a month. The CF2201 contract has approached the 22,000 yuan/ton mark, and the CF2205 contract price has also risen to around 21,000 yuan/ton. This increase is really significant, especially in the pessimistic atmosphere of the market. It’s really not easy to perform like this.
In late December, the United States signed the so-called “Uyghur Forced Labor Prevention Act” into law, deeming all products produced in Xinjiang to be so-called “forced labor” products and banning the import of Xinjiang-related products. Despite this, Zheng Mian was not sensitive to its reaction and fluctuated upward again after a short adjustment. Although the bill has limited impact for the time being, the author believes that it will play some role in the future, just like after the Sino-US relations reached a stalemate in 2018, when the price of Zheng cotton started a two-year bear market after reaching a high point.
Of course, there is also good news in the market. China will receive a big gift in 2022. On January 1, the Regional Comprehensive Economic Partnership (RCEP) officially came into effect, with six ASEAN member states including Brunei, Cambodia, Laos, Singapore, Thailand, and Vietnam and four non-ASEAN members including China, Japan, New Zealand, and Australia. Member states have officially begun implementing the agreement. This “Regional Comprehensive Economic Partnership Agreement”, which was successfully negotiated after eight years of arduous negotiations by all parties, marks the official launch of the free trade zone with the largest population, largest economic and trade scale, and the most development potential in the world, which will contribute to the economic development and prosperity of the region. make important contributions.
The market in December was full of long and short factors, but there must be good reasons for Zheng cotton to continue to rise. According to the author’s observation, there are two main reasons: First, the spot price has returned. Due to the high spot cost, the futures price is at a discount. As the delivery month approaches, futures prices gradually rise and move closer to spot prices; secondly, foreign cotton prices are strong, especially Indian cotton, which performs well. Coupled with European and American orders gradually returning to India, cotton production decreases and consumption increases, causing Indian cotton prices to rise sharply. As for whether hedging opportunities can be given to cotton ginning enterprises, it still needs to be verified by the actual operation results of the market. After all, whether financial capital is willing to “carry the sedan chair” for the industry is unknown, but the 2201 contract should still have some room for upside before delivery.
</p
