Looking forward to it, looking forward to it… Cotton yarn futures will be listed on the Zhengzhou Commercial Exchange, and it will finally come tomorrow! my country is the world’s major producer and consumer of cotton, cotton yarn and clothing. The listing of cotton yarn futures will undoubtedly have a profound impact on the domestic cotton and cotton yarn industry. Market participants generally believe that with the abundant domestic cotton and cotton yarn market resources and the scientific contract design close to the actual market demand, the development prospects of cotton yarn futures are very optimistic and are expected to become the benchmark for the global cotton yarn market in the future. People in the textile industry are relatively familiar with the variety of cotton yarn, but they are still relatively unfamiliar with the new thing of cotton yarn futures. So what should textile companies pay attention to after cotton yarn futures go online? What risks need to be guarded against?
“In the cost structure of cotton yarn, raw materials account for about 70%. In addition to raw material prices, costs such as energy consumption, labor, and machine materials are all manufacturing expenses.” Zhang Man, deputy general manager of Beijing Cotton Outlook Information Consulting Company, said that due to the product Different companies and different companies have different manufacturing costs. Generally speaking, the higher the yarn count, the higher the requirements for cotton, and the manufacturing costs will increase accordingly. In terms of manufacturing expenses, affected by factors such as equipment, labor quality, financial institution policies, etc., the proportions of each enterprise are also different.
It is understood that the benchmark cotton yarn futures delivery product of Zhengzhou Commercial Exchange is 32-count carded yarn, with a manufacturing cost of 5,000-6,000 yuan/ton, and a 40-count combed yarn with a manufacturing cost of 7,000-7,500 yuan/ton. The manufacturing cost of similar products in India and Vietnam is about 1,000 yuan/ton lower than that in my country.
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According to Dong Shuzhi, founder of Hedging Research Investment, there are good cross-market arbitrage opportunities between spinning yarns from India, Vietnam and other countries and my country’s cotton yarns. “The reason why arbitrage opportunities exist is mainly due to insufficient market efficiency, insufficient market participants, and imbalances in supply and demand.”
“Arbitrage trading, selling hedging and point-price trading are market trading opportunities that we are concerned about, and the most concerning of them are arbitrage opportunities between different markets.” A cotton-related company said at the meeting.
Regarding the delivery rules of cotton yarn futures, Wang Yan, a researcher at CITIC Futures, said that the benchmark delivery product of cotton yarn futures is 32-count carded cotton yarn, and the delivery method is credit warehouse receipt and factory delivery. The delivery method is the introduction of self-reported rising prices for non-standard warehouse receipts. Agios. Entering the delivery month, between the 1st and 9th trading days, buyers and sellers can negotiate to deliver cotton yarn with factory non-standard warehouse receipts, and self-report premiums and discounts. On the 10th trading day, only standard warehouse receipts are allowed to be delivered to ensure delivery consistency.
“Judging from historical data, there is a strong correlation between cotton yarn and cotton prices, above 97%.” Zhang Man said that according to years of research, cotton stocks have different sensitivity to cotton prices. “When cotton stocks are high, when cotton prices fall, cotton yarn follows the decline more quickly; when cotton prices rise, cotton yarn reaction is lagging behind. When cotton stocks are low, cotton prices fall, and cotton yarn slowly digests the impact of the fall in cotton prices; while when cotton prices When prices rise, cotton yarn quickly follows the rise.”
It is understood that in order to avoid the price impact of imported cotton yarn and to ensure a stable start of cotton yarn futures, the delivery of imported cotton yarn is not allowed in the initial stage of the listing of cotton yarn futures. After the smooth operation in the later period, the delivery of imported cotton yarn will be gradually opened.
Instructions for launching cotton yarn futures
1. The call auction time on the day of listing is 8:55-9:00. Starting from the evening of August 18, cotton yarn futures will conduct night trading, and the trading time is 21:00-23:30.
2. The Zhengzhou Commodity Exchange announced the premiums and discounts for cotton yarn futures factory warehouses. Among them, the premiums and discounts for cotton yarn delivery factories in Henan, Shandong and Jiangsu are 0 yuan/ton, and in Zhejiang, the premiums are 380 yuan/ton.
3. The list of cotton yarn futures factories was announced, involving a total of 35 companies, including 16 in Henan, 8 in Shandong, 7 in Jiangsu, and 4 in Zhejiang.
4. Cotton yarn futures were launched on August 18. The first batch of listed cotton yarn futures contracts are CY1801, CY1802, CY1803, CY1804, CY1805, CY1806, CY1807, and CY1808. The benchmark price of each contract is 23,000 yuan/ton.
5. The storage fee for cotton yarn delivery factory is 2 yuan/ton·day.
6. The price limit on the day of listing is ±8% of the contract’s benchmark price, and the trading margin is 5%. The standard trading fee for cotton yarn futures is 4 yuan/lot. From the date of listing, the handling fee for opening and closing positions on the cotton yarn futures contract will be reduced by half, and the delivery handling fee, warehouse receipt transfer fee, and futures to spot handling fee will be charged at 0.5 yuan/ton.
Notice on Designated Cotton Yarn Delivery Factory and Premiums and Discounts
(2017) No. 9
After research and decision, the following companies are designated delivery factories for cotton yarn: Xuchang Yufeng Textile Co., Ltd., Xiangcheng Textile Co., Ltd., Wugang Yutai Textile Co., Ltd., Wugang Yinhe Textile Co., Ltd., Weishi Textile Co., Ltd., Tai Kangxian Wanliyuan Cotton Co., Ltd., Shangqiu Zhongtian Textile Co., Ltd., Shangqiu Huifeng Cotton Co., Ltd., Puyang Xinsanqiang Textile Co., Ltd., Nanyang Yuxiang Textile Co., Ltd., Nanyang Textile Group Co., Ltd., Jiaozuo Haihua Textile Co., Ltd., Henan Yongan Textile Co., Ltd., Henan Xinye Textile Co., Ltd., Henan Huaxing Science and Technology Co., Ltd., Dengzhou Yongtai Cotton Spinning Co., Ltd., Xiajin Fengrun Industrial Co., Ltd., Shandong Mingsheng Textile Co., Ltd., Shandong Daiyin Textile Group Co., Ltd., Shandong Dahai Group Co., Ltd., Shandong Chaoyue Textile Co., Ltd., Linqing Sanhe Textile Group Co., Ltd., Vosges Group Co., Ltd., Feicheng Longxiang Textile Co., Ltd., Xuzhou Tianhong Times Textile Co., Ltd., Shanghai Textile (Group) Dafeng Textile Co., Ltd., Nantong Huaqiang Cloth Co., Ltd., Jiangsu Shuangshan Group Co., Ltd., Jiangsu Donghua Textile Co., Ltd., Jiangsu Dasheng Group Co., Ltd., Huafang Group Co., Ltd. Zhejiang Shuangke Textile Co., Ltd., Zhejiang Huafu Colored Textile Co., Ltd., Zhejiang Hangmin Keer Textile Co., Ltd., Zhejiang Chunjiang Light Textile Group Co., Ltd.
The warehouse premium and discount of cotton yarn delivery factories in Henan, Shandong and Jiangsu is 0 yuan/ton, and the warehouse premium and discount of cotton yarn delivery factories in Zhejiang is 380 yuan/ton.
The above designated delivery factories have started to carry out cotton yarn futures delivery business since December 1, 2017. Please see the attachment for specific contact information.
announce.
Attachment: List of designated cotton yarn delivery factories
Zhengzhou Commodity Exchange
August 14, 2017
appendix:
List of designated cotton yarn delivery factories
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