How To Interpret The Logic Of Throwing And Storing Policy

At the beginning of the year, the market for the country

Too pessimistic, the market is down and down again. We saw 9500 at the beginning of the year, and some even thought it would go to 8000, ICE to 40 cents.

At that time, the market thought that not only the huge quantity of dumping and storage would be a serious impact on the market, but also a very pessimistic view of the consumption of Chinese textiles.

The smaller the amount of cotton, the more pessimistic atmosphere of the market.

But then we saw that the international market did not show the same decline.

Our consumption is not declining but rising.

After the emergence of low price cotton, our price is really in line with the international market. Our company even ushered in a long lost profit. The profit of cotton yarn is over 1000 yuan.

Today we go to the other extreme, that is to say, our cotton prices are rising at a price per day, can cotton consumption continue to grow? Because of the delay in throwing storage time, and then we see the quantity and progress of dumping, which is far from meeting the market demand or expectation as promised.

For example, if thirty thousand tons per day.

With a turnover rate of seventy percent, the reserves will be increased.

As a result, thirty thousand tons often fail to reach 100% daily turnover, let alone increment.

From the beginning of the interpretation of policy to the process of dumping and storage, it is the process of passing spot futures.

So far, we are still reading, implementing, expecting and trading around the policy of dumping and storage.

Others are floating clouds.

There may be various claims in the market, such as capital push, technology graphics, India cotton price rise, USDA report, and so on.

Yes, but the core logic is to throw away reserves.

In other words, if the policy of dumping and storage is like that, 30 thousand tons per day will not be enough to throw 50 thousand tons. Can we imagine the difference between our current market trading process? The answer is 100%.

What is the result?

At the same time, it is also a double-edged sword. The domestic cotton mill has suffered heavy losses, the consumption has declined, and the import yarn has increased.

The enthusiasm of production.

Going stock is hard and long.

Do not think that the stockpile of cotton stocks is a matter that is irrelevant to finance. With a little economic sense, it can be calculated that the annual cost and quality variation is also a waste of tens of billions of dollars, and no one gains.

Before 2012, cotton consumption accounted for more than 50% of global textile fiber, to about 27% now.

The reason for the sharp decline in cotton consumption is the high price of cotton for 12 years, leading to the replacement of cotton with all kinds of man-made fibers.

There are few good days for cotton.

This round of cotton rose, the downstream reflects very slowly, the price of man-made fibers will not follow, will bring hidden trouble to the future consumption of high priced cotton.

Although it seems that the daily reserves are insufficient, we have dropped one million tons in 562 months.

In fact, one million tons, plus imports, plus this year's spot, is enough for two months of consumption.

But why is there such a panic? There may be two reasons. First, enterprises want to increase inventories to cope with uncertain supply.

Two, many of the national cotton reserves were taken by traders.

In statistics, maybe forty percent of the proportion is removed for part of the shoot for the textile mill. Cotton traders will buy the cotton bags later, and form their own stocks.