Master the knowledge of cotton yarn futures to maintain the first-mover advantage of the enterprise

A few days ago, with the strong support of ZCE, Weishi Textile Co., Ltd. and Haitong Futures jointly held the 'Henan Cotton Textile Entrepreneur Risk Management Seminar' in Zhengzhou. At the meeting, professionals analyzed the trend of textile production and sales under the new crown pneumonia epidemic, shared cotton yarn futures hedging experience, cotton yarn futures arbitrage practical experience, explained the cotton yarn futures delivery system, and discussed the risk management strategy of cotton textile enterprises . At the end of 2019, when the domestic cotton and cotton yarn market was thriving, the new crown pneumonia epidemic emerged. The cotton and cotton yarn market, especially the price, has undergone earth-shaking changes. The epidemic hit directly below 10,000 yuan/ton. Although it slowly rebounded to the current 12,000 yuan/ton, the cotton market situation was still complicated by the start of the state cotton reserve, the continuous spread of epidemics in the United States and India, the volatile supply and demand situation of major producing countries in the international market, and the release of many currencies. . As a downstream product of cotton, the cotton yarn market is naturally more volatile. At the same time, the large reduction in foreign orders and the deterioration of local political and economic situations are increasing market risks. Industrial enterprises are facing many difficulties in achieving stable business goals and even survival. Difficulties are urgently needed to be resolved by various means, especially good futures tools. Hong Yang, director of Zhejiang Shuangda Textile Futures, believes that in the current cotton yarn market, traditional trade models still dominate, and some industrial companies have suffered large losses in recent years. Although some traditional traders have futures awareness, it is difficult to adhere to the spot concept. Make effective use of futures tools. The raw material of cotton yarn-cotton has a very close linkage between the futures and the current market, and the market trading method is dominated by basis price trading. While the downstream cotton yarn market still adheres to the traditional spot trade model, the price transmission from raw materials to finished products lags behind. This is bound to bring huge opportunities to companies that can use futures tools to operate cotton and cotton yarn arbitrage. It is expected that in the future, more and more downstream cotton enterprises will use futures tools, and a reshuffle process will occur in the cotton yarn trade industry. The sooner textile companies master futures knowledge and learn to use futures tools, the sooner they will gain first-mover advantage.　　According to a reporter from the Futures Daily, since the implementation of the new contract rules for cotton yarn futures in March 2019, the current spread of cotton yarn futures has fluctuated between plus and minus 2,000 yuan/ton, and there is a huge opportunity for arbitrage in cotton yarn futures. At the same time, in the cotton and cotton yarn market, the integration of industry and finance has become a mainstream development trend. For example, since the end of March this year, the current price differential for cotton yarns has expanded from -2000 yuan/ton to about 500 yuan/ton, and the basis has weakened by 2500 yuan/ton. In the process of basis weakening, the market will have the phenomenon of futures floating loss and spot falling. Industrial enterprises will face greater pressure on funds and inventory when they carry out futures arbitrage operations by their own strength. At this time, the effect of choosing to cooperate with institutions will be more effective. Great. According to the participants, the current delivery products of cotton yarn futures are 32S standard products, which account for a relatively large proportion of market consumption. In the future, 40S alternatives will be launched, which can provide more abundant delivery products and meet the needs of cotton spinning enterprises for arbitrage of the same variety. Demand, and the activity of cotton yarn futures will provide more opportunities for the cotton spinning industry to intervene and avoid risks such as sales collection. It is expected that cotton yarn futures are expected to become an international variety in the continued advancement of the “Belt and Road” initiative in the future. Article keywords: 　Zhengzhou Commodity Exchange Cotton Yarn Futures Henan Province Cotton Textile Entrepreneurs Risk Management Seminar