Since November, cotton yarn futures have bottomed out and rebounded. The main contract CY2301 has risen from 19,000 yuan/ton to 21,485 yuan/ton. It is currently consolidating in the range of 20,500-21,000 yuan/ton. It has increased by 2,485 points in just one month, and its performance is stronger than other commodities. futures. But what is puzzling is that the ex-factory price of cotton yarn and the quotation in the light textile market not only did not rise with the cotton yarn futures, but continued to fall.
Some small and medium-sized textile enterprises in Shandong, Henan, Hebei and other places have generally lowered their quotations by 500-800 yuan/ton for C21S and above count cotton yarns compared with October. The quotations for OE yarns, low-count ring spinning yarns, and low-count siro spinning yarns have been slightly lower. Small, about 300-400 yuan/ton.
Why do cotton yarn spot trends deviate from cotton yarn futures? The author’s judgment is mainly affected by the following factors:
First, cotton spot prices fell instead of rising, and spinning costs fell. Although the main contract of Zheng cotton rose by more than 1,300 points in early and mid-November, domestic cotton spot quotations were unable to keep up with the increase. A large number of Xinjiang cotton processing enterprises and traders not only did not increase the fixed price of lint but also continued to decrease. According to statistics, since November, the fixed price of “Double 28” (or Single 29) machine-picked cotton in Xinjiang’s supervision warehouse has dropped from 14,100-14,400 yuan/ton to the current 13,600-13,750 yuan/ton, a decrease of more than 500 yuan/ton.
Second, the yarn accumulation rate of cotton spinning enterprises continues to increase, and they are passively reducing prices to remove inventory. The textile and clothing industry’s “Golden Nine and Silver Ten” orders were significantly lower than expected, and the operating rates of weaving factories in coastal areas also continued to decline. Among them, the operating rates of weaving companies in Foshan, Shaoxing, Xiangshan, Nantong and other places were generally lower than 50%, and the inventory of finished products in yarn mills increased. The trend continues unabated. In order to revitalize funds and maintain production, “reducing inventory and collecting funds” has become a routine operation for textile enterprises.
Third, the market prices of Zheng cotton and Zheng cotton yarn continue to be inverted with the spot prices of cotton and cotton yarn. The increase in the January contract is just the need for the return of futures. In November, the contract price of Zheng cotton CF2301 and the spot sales quotation of grade 3128B in Xinjiang were “inverted” and once reached more than 1,200 yuan/ton, while the contract price of cotton yarn CY2301 was 1,500-2,000 yuan/ton lower than the spot price, which is obviously unreasonable. Therefore, the sharp narrowing of the current price difference of cotton yarn futures is the need of fundamentals and market.
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