Tongzhou Market Information Brief, Week 2 of June 2021
I. US Cotton
Positive factors:
1) Global economic data has reached a new high since 2008, suggesting further upward potential for global cotton consumption in the 2021/2022 season.
2) The cotton/soybean and corn price ratio is at a historical low, discouraging increases in cotton planting acreage in various countries.
3) The downstream cotton industry chain in China and Southeast Asia is improving, with strong orders and rising restocking demand for cotton.
4) Indian cotton prices continue to rise, narrowing the price gap between the US and India, and raising the bottom of global cotton prices.
Negative factors:
1) US inflation data continues to rise, and the market is concerned that the Federal Reserve will start raising interest rates/reducing its balance sheet ahead of schedule.
2) The G7 meeting targeted China, and Sino-US friction has created negative sentiment.
3) The progress of planting in the US is accelerating, and the good rate is improving; the Indian monsoon is expected to be relatively stable, and water reserves in Australia continue to improve, which are favorable for stable/increased global production in the 2021/2022 season.
4) Repeated outbreaks of the epidemic in India and Southeast Asia have suppressed cotton demand to some extent.
II. Zhengzhou Cotton
Positive factors:
1) Global economic data has reached a new high since 2008, suggesting further upward potential for global cotton consumption in the 2021/2022 season.
2) Cotton spinning mills are still highly profitable, and have a desire to replenish stocks at lower prices, which supports cotton prices.
3) The epidemic in India and the blockade in Bangladesh have led to a certain return of foreign orders.
4) Due to abnormal weather during the planting season and a decrease in planting area in Xinjiang, the market estimates that production will likely decline year-on-year.
Negative factors:
1) Weaving mills have accumulated finished goods inventory, the operating rate has declined, and the increase in yarn mill finished goods inventory shows a certain off-season characteristic downstream.
2) Commercial cotton inventories remain relatively large, and coupled with the expectation of reserve releases, the market does not lack cotton.
3) The price difference between domestic and international markets is large, and the demand for imported cotton and yarn has increased significantly, further increasing the pressure on domestic supply.
4) The G7 meeting targeted China, and Sino-US friction has created negative sentiment.
• Core Logic: The decline is supported by the downstream industry, and the rise is pressured by inventory. In the long term, there is a driver of positive global economic growth, and in the short term, there is pressure from concerns about tightening global liquidity. However, the global production situation currently being tracked is good, dragging down the long-term bullish expectations. The price difference between domestic and international markets is large above the sliding-scale tariff, and there is a driver of industrial return, with a time frame of 1-12 months.
• Variables to watch: Fiscal and monetary policies of various countries, production variables caused by weather, downstream industry tracking, and reserve release policies.
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
Mobile
CopyRight © 2025 Henan Tongzhou Cotton Industry Co., Ltd.