Cotton Prices Rose At Home And Abroad, And The Rules Were In Line With The Intention Of Spinning Enterprises.

In April 15th, the national development and Reform Commission and the Ministry of Finance jointly issued a notice on the arrangement of the national cotton reserves.

At this point, the industry's long-awaited 2016 cotton spinning policy finally landed.

The announcement of the rules for the delivery of cotton reserves has given a sigh of relief to the industry chain, which has always been on the alert.

With the applause of cotton enterprises, but with the increase of cotton prices, the industry just started to become restless.

The announcement of the relevant arrangements for the national cotton reserve clearly indicates that the time of the national cotton storage rotation in 2015/2016 is 31 days on May 3rd ~8, and the total output does not exceed 2 million tons. The reserve cotton is organized by the China Fiber Inspection Bureau to conduct a comprehensive notarization of quality and weight (Bao Baojian).

The two principles of "multiple rounds, fewer rounds" and "priority of cotton production outside the country, and long storage time" are also in line with the expectations of all parties.

The announcement of the rules for the delivery of cotton reserves has given a sigh of relief to the industry chain, which has always been on the alert.

For the details of the rules, the textile and cotton enterprises applauded, but with the increase in cotton prices, the industry just started to become restless.

Round out rules conform to the intention of spinning enterprises

Some people in the industry use "stable, accurate and ruthless" to describe the national cotton store's rotation. In particular, the price of the round trip is bundled with the Cotlook A (real ICE futures) index and adjusted once a week to truly achieve internal and external prices.

Price linkage, linkage and combination are conducive to maintaining the stability of cotton prices, improving the competitiveness of cotton textile exports and China's cotton industry "

"Degree".

This round of reserve cotton will reinspect the quality and weight comprehensively, quality package inspection, weight batches inspection, and market speculation completely coincide, which also improved the enthusiasm of textile enterprises to buy cotton reserves.

In addition, the rules specify that priority will be given to the rotation of imported cotton.

That is to say, textile cotton enterprises can purchase high-quality cotton from national cotton stores.

Wang Quanfa, chairman of Henan Yongan Textile Co., Ltd., said that since the announcement of the cotton spinning wheel, the enterprise has always maintained a low cotton stock. The reserve cotton wheel rules have been promulgated and the price has been in line with the market. This is a great improvement compared with the previous ones, so long as there is cotton that meets the requirements of the quality of the enterprise, the enterprise will buy it.

The reporter understands that most enterprises tend to purchase high quality cotton with good quality.

In this regard, Li Zhenhua, a senior cotton analyst at Huarui information and information company, said that according to the current market consumption situation, it is estimated that in addition to some cotton with better quality indicators, the competition of other national cotton stores will not be too intense at auction, and the actual paction price is limited.

Unless the domestic production of conventional yarn spinning enterprises recoveries a lot, the start-up rate will increase and thus bring about substantial growth in raw material demand, but this needs a process.

Cotton prices rose at home and abroad.

In recent years, the price of cotton reserves has gradually declined.

Especially in 2015, the domestic base price of cotton wheels has dropped to 13200 yuan / ton.

In 2016, as the reserve cotton combined with domestic and international cotton prices, the reserve price would be further lowered.

However, under the expectation of lower price, the market is running counter to it. Both the cotton futures market and the spot market respond to the attitude of price rise.

Since the announcement of the reserve cotton rotation policy in April 15th, the first day of the opening of the cotton futures market, in April 18th, Zheng Mian futures prices responded to the price limit. The price of ICE cotton main contract was also rising, rising 3.68% to 62.23 cents / pound, the biggest one-day gain in 8 months.

The spot market of cotton also showed a large increase in quotations. Some traders raised their quotas by 300 yuan / ton, while others simply "hoarding" and stopped offering quotations.

At present, the main contract 1609 of zhengmian futures is still in the trend of rising prices. The cumulative increase this month has reached 24.02%, and the price has risen to the level of late November last year.

Analysis of the industry, because in the process of cotton prices fell before, inventory means loss, so many enterprises are very low inventory, and this round of rising cotton prices, textile enterprises replenishment demand is only a small part, more because of the operation of futures market funds.

In the face of the soaring price of futures and spot cotton, the NDRC responded positively, making clear that the state reserve cotton stock is sufficient, if the market needs, the amount of cotton reserves and the number of daily listing can be increased at any time.

In April 21st, Zheng Shang also issued a reminder letter for the risk of cotton market, which prompted enterprises to operate prudently and rationally invest.

This also confirms that there is speculation in the market that the price of cotton in the futures market has soared.

China Cotton Textile Industry Association also announced that cotton textile enterprises should take a rational view of the rise in cotton prices. From the actual paction situation, the price of pure cotton yarn has not been improved, and some of the colored spinning products are on the decline, and the order and price of non cotton yarn are basically stable.

This shows that the rising price of the current cotton futures is not caused by the demand pull in the downstream market.

The pattern of supply and demand has not changed significantly, reflecting the fact that downstream weaving and knitting enterprises do not accept price increases, and lack of upward momentum.

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Textile enterprises worry about pulling up reserve cotton prices

The biggest change in reserve cotton production this year is the linkage between the price of cotton reserves and the market. The cotton spot price index in the domestic market and the spot price index in the international market are calculated by 50% weight and adjusted once a week.

And the rising cotton prices in the current spot market can't help textile companies worry about the cost performance of cotton reserves.

According to the formula of reserve cotton rotation, the price of cotton keeps rising with the rising cotton price.

According to the cotton price in April, the average price of CCIndex3128B week is 11691 yuan / ton in the week of April 5th ~4 8, the average price of CncottonB week is 11689 yuan / ton, the average weekly price of CotlookA (RMB) is 10997 yuan / ton, then the price of the reserve cotton should be 11343 yuan / ton.

In the week of April 11th ~4 15, the calculated price of the reserve cotton was 11548 yuan / ton, which was about 200 yuan higher than that of the previous week. By April 20th, the calculated reserve cotton price had risen to 11871 yuan / ton.

If domestic cotton prices continue to be strong, we will not rule out the continued expansion of cotton prices at home and abroad.

The price of CNCotton B, Cotlook A and CCIndex 3128B will be decided on April 25th ~29 day. The sale price of the cotton reserve will be decided in May 3rd. When the cotton price goes, how can the cotton price go?

Wang Jiayu, chairman of Nantong Shuang Hong textile company, believes that if the price of cotton continues to rise, the auction price will certainly rise. The actual paction price is bound to be higher than the starting price, so the cost performance of the reserve cotton will be greatly reduced.

Henan Ping cotton textile company official said, affected by the impact of the reserve cotton rotation, at present, some small-scale spinning enterprises with a size of about 10 thousand spindles and ~3 spindles are returning to work.

If cotton prices can run smoothly, the production of small textile enterprises will continue to improve. Otherwise, the low spun yarn market will still be the world of imported yarn.

Or impact on imported yarn

The rotation of reserve cotton has a more obvious impact on the downstream spinning market.

Since January 2016, China's cotton and cotton yarn imports have plummeted, much lower than the same period last year, mainly due to the decline in cotton prices and the loss of foreign cotton and cotton yarns.

Reserve cotton is about to turn out, and the price will be kept in line with the international cotton price. The price advantage of foreign cotton yarn will no longer exist. At present, the domestic cotton price seems to have seen hope for imported yarn enterprises.

In this regard, the relevant people believe that the reserve cotton rotation will still cause certain impact on imported yarn.

Because of its low quality and low strength, the reserve cotton is more suitable for spinning 32 yarns, and it will compete with the imported yarn market.

As the reserve cotton production will promote the recovery of some mid and low end yarn production in China, the market competition will become increasingly fierce under the premise of no significant increase in cotton yarn consumption.

In May 3rd, the reserve cotton will be officially released. The package inspection will increase the difficulty and time of shipment. Therefore, the estimated time to deliver the goods will be two weeks. Then, starting from late May, the low price domestic yarn produced by the reserve cotton will be "confrontation" with the imported yarn.

Since the price of the reserve cotton has been linked at home and abroad and is in line with the international cotton price, there is little difference in the raw material price between the domestic yarn and the imported yarn, so the large discount of the reserve cotton will inevitably reduce the cost of the domestic yarn greatly, and has a larger price advantage than the imported yarn.

Therefore, from the end of May to the turn of August, under the "strike" of domestic yarn, the survival space of imported yarn will be more difficult.

Detailed rules for cotton reserves:

The general idea of cotton storage digestion: the main way to digest cotton reserves is to operate asymmetrically, first round, and multiple rounds.

The way out: reserve cotton rotation is sold on the principle of open auction in the national cotton trading market. If necessary, the state will increase other designated trading platforms to carry out the reserve cotton trade.

Turn out time: from May.

The specific rotation time is the national statutory working day of August 31st May 3, 2016 ~2016.

The number of rounds: the total output should not exceed 2 million tons.

In principle, the number of daily sales is not more than 30 thousand tons, giving priority to arranging imported cotton wheels.

The price of the rotation: the reserve price of the cotton sale is determined according to the market dynamics. In principle, the selling price is linked to the spot price of cotton at home and abroad. The cotton spot price index in the domestic market and the cotton spot price index in the international market are determined by 50% weight, adjusted once a week.

Notarial inspection: the reserve cotton for rotation is organized by the China Fiber Inspection Bureau to conduct a comprehensive notarization test on the quality and weight.

The formula for calculating the reserve price of cotton reserves is:

The formula is as follows: this week, the reserve price of cotton reserves is sold (the discount standard level 3128B) = the average price of the cotton spot price index in the domestic market last week. The arithmetic average value of 50%+ is 50%.

Among them, the cotton spot price index in the domestic market is [China cotton price index (3128B variety) + the national cotton price index (3128B varieties)] 2; the spot price index of cotton in the international market is the ctlock A index (US $/ ton) x exchange rate * (1+ tariff 1%) x (1+ value-added tax 13%); the exchange rate refers to the customs tax collection method, using the third Wednesday of last month (for example, when the statutory holidays are postponed to fourth Wednesday), the benchmark exchange rate of foreign currency issued by the people's Bank of China.