After the recent oversold rebound, Zheng Cotton has entered a range consolidation stage. The main CF2109 contract this week is hovering in the range of 15,700-15,900 yuan/ton, and the spot price and trading volume have stabilized. In late May, the price of Zheng cotton dropped sharply to about 15,300 yuan/ton, providing many textile companies with an excellent opportunity to replenish their stocks at low prices. This also promoted some large cotton-related companies to quickly reduce their cotton inventories. At present, it is a basic consensus that domestic industrial inventories are relatively high compared with the same period last year. However, some textile companies still express shortages of raw materials. Why is this?
According to feedback from some textile companies in Henan and Shandong, the early decline in Zheng cotton futures prices has indeed provided companies with opportunities to restock raw materials, especially the main contracts at 15,400-15,600 yuan/ There are many transactions based on the ton-hour basis difference, and the spot transactions are mostly low- to medium-grade Xinjiang cotton with a length of 27 or 28 mm and a strength of 26 or 27. As far as specific production and processing are concerned, the outstanding problem in raw material replenishment is still the lack of high-quality cotton. This is the most common and difficult to solve problem for most textile enterprises producing high-count yarns.
Why is there a lack of high-quality cotton? The main reasons are as follows: As we all know, judging from the domestic Xinjiang cotton processing situation in 2020, the length, strength, horse value and other indicators are not as good as those in the previous two years. In particular, the proportion of double 28-double 30 supply has significantly reduced. After experiencing After half a year of consumption, there are currently very few high-grade resources; on the other hand, with the popularity of cotton futures hedging, more and more ginning companies are avoiding risks by registering high-quality cotton as Futures warehouse receipts earn high premiums, causing some high-quality supply sources to be locked into static inventory. Furthermore, most of the high-quality imported U.S. cotton currently on sale is old cotton, and its low cost performance has discouraged textile companies. It is gratifying that the quasi-tax quota for imported cotton is about to be issued, and textile companies can purchase a certain amount of high-grade imported cotton to meet demand. However, in the medium and long term, high-quality supply still has a strong competitive advantage. </p
