Tongzhou Market Information Brief, Week 3 of January 2021
I. COVID-19 Pandemic and Vaccine Progress
As of the 17th, the cumulative number of global COVID-19 infections has exceeded 95 million. Last week, the daily global increase was around 700,000, continuing to decline from the previous week. The daily new cases in the US and UK have also decreased compared to the previous week. Multiple outbreaks have occurred domestically. Currently, there are 3 high-risk areas and 86 medium-risk areas nationwide. The daily increase in confirmed cases in China has begun to decline, indicating that the epidemic control has shown results.
II. International Market Information
1) As of the 15th, the cumulative inspection volume of US cotton reached 13.38 million bales, accounting for 91% of the estimated 14.95 million bales. The weekly volume continues to decline, which supports the USDA's assessment of production from a weekly perspective. The January report is the USDA's production report, and it is estimated that no further adjustments will be made to production before September.
2) As of the 7th, the cumulative sales of US cotton reached 2.83 million tons, and the cumulative shipment reached 1.39 million tons. The contract progress is 86.5%, and the shipment progress is 42.7%, which is still the fastest historical level. It is expected that the export volume of US cotton will be further increased, corresponding to a tighter balance sheet.
3) As of the 15th, India's cumulative listing reached 2.87 million tons, an increase of 18.8% year-on-year. The daily listing volume dropped to within 25,000 tons last week. After the price increase, the reserve volume slowed significantly, and the reserve transaction last week was approximately 70,000 tons.
4) Overseas machine operation remains high, yarn prices are stagnant, and processing profits are still the best historical processing profits. Price increases are transmitted smoothly.
III. Domestic Market Information
1) As of January 14, a cumulative 5.4 million tons were processed, including 5.26 million tons in Xinjiang and 137,000 tons in mainland China. The average daily processing volume last week was 22,000 tons, the highest in recent years. Based on the current listing progress in Xinjiang, the estimated production in Xinjiang is 5.31 million tons.
2) Last week, 6,920 tons of 1920 warehouse receipts were cancelled, mainly 1228 and 1229. 51,800 tons of 2021 warehouse receipts were registered, including an increase of 4,480 tons in mainland China and nearly 47,300 tons in Xinjiang. On the 15th, the total amount of warehouse receipts was 645,000 tons, of which 95% was new cotton and 5% was old cotton. The proportion of 3128 and 3129 cotton in new cotton decreased to 83%.
3) Downstream textile enterprises' yarn inventories continued to decline, gray fabric machine operation decreased, textile enterprises' processing profits continued to improve, and some began to place yarn orders for May.
4) Port inventory of imported yarn is 76,000 tons, an increase of 3,000 tons from the previous week, and the machine operation of downstream enterprises using imported yarn has slightly decreased.
IV. Domestic Market Bullish and Bearish Factors
Bullish Factors
1) Textile companies' yarn inventories continue to decline and have reached a historical low. Inventories across the entire industrial chain are at low levels.
2) Domestic and foreign companies' processing profits are very good, and price transmission is smooth.
3) Hedging pressure has been significantly released.
Bearish Factors
1) Due to the holiday factor, gray fabric machine operation continues to decline.
2) Supply pressure from imported cotton after quota allocation.
3) Pressure from a large number of imported yarns arriving at ports. Port inventories of imported yarn began to increase last week.
4) Continued fermentation of US sanctions on Xinjiang cotton products.
V. International Market Bullish and Bearish Factors
Bullish Factors
1) Overseas machine operation remains high, and weaving factories' processing profits are high.
2) The balance sheet for US cotton is expected to tighten further.
3) Quota allocation is conducive to the digestion of imported cotton.
4) The price ratio of cotton to soybeans and corn has further decreased, which is not conducive to cotton planting.
Bearish Factors
1) Soil moisture conditions in Texas have improved for three consecutive weeks and need further attention.
2) The progress of the overseas epidemic and Sino-US relations, and attention to China's countermeasures against the Xinjiang cotton ban.
Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance
On March 3, Wang Yongqing, Vice President of Xiamen CNOOC Group, visited Tongzhou Group for investigation and guidance. Wei Gangmin, Chairman of our company; Huang Hongyu, President; Li Tao, Vice President; and Zhang Zhiyan, Director of the General Office, met with and participated in a symposium.
Tongzhou Cotton Market Brief, Week 1 of March 2025
1) This week's National People's Congress and the Chinese People's Political Consultative Conference (NPC & CPPCC) in China boosted market expectations for steady growth. In February, the Purchasing Managers' Index (PMI) for manufacturing stood at 50.2%, up 1.1 percentage points from the previous month, indicating a significant improvement in the manufacturing sector.
In 2024, China's dyeing industry saw rapid export growth to ASEAN and RCEP member countries, exceeding the overall export growth rate. However, this growth was accompanied by a decline in prices. From January to December, China's exports of eight major dyeing products to ASEAN totaled 7.908 billion meters, a year-on-year increase of 12.14%, 4.61 percentage points higher than the overall export growth rate, accounting for 23.58% of total exports. The average export price was US\$1.19 per meter, a year-on-year decrease of 2.75%, 0.64 percentage points lower than the overall decline. Exports to RCEP member countries totaled 8.431 billion meters, a year-on-year increase of 11.35%, 3.82 percentage points higher than the overall export growth rate. The average export price was US\$1.17 per meter, a year-on-year decrease of 2.79%, 0.60 percentage points lower than the overall decline.
On February 28, Mr. Huang Hongyu, President of our company, was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference and, as a guest speaker at the "Xiangshan Roundtable," shared his views on the cotton market and trading opportunities.
Henan Tongzhou Cotton Industry Co., Ltd.
Contact
Henan Tongzhou Cotton Industry Co., Ltd.
Address: 10th Floor, Henan Nongxin Building, No. 19 Commercial Outer Ring Road, Zhengdong New District,Zhengzhou, China
Tel：86037165836206
Email：tongzhou@tongzhoucotton.com
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