Tongzhou Market Information Brief, Week 2 of August 2021
I. US Cotton
Bullish factors:
1) US liquidity has not yet tightened, and loose monetary policy continues.
2) European and American consumption is still recovering upward.
3) Indian cotton prices continue to rise, narrowing the price difference between the US and India, raising the bottom of global cotton prices.
Bearish factors:
1) US July non-farm payroll data exceeded expectations, and the Federal Reserve may reduce bond purchases sooner.
2) The resurgence of the epidemic in the US and Southeast Asia has suppressed cotton demand to some extent.
3) US weather conditions are excellent, the good rate is at a historical high, the abandonment rate is continuously decreasing, and recent rainfall in India is conducive to increasing/stabilizing cotton production.
II. Zhengzhou Cotton
Bullish factors:
1) Xinjiang is expected to reduce production by 400,000 tons, rising planting costs, and expansion of downstream textile production capacity stimulate the rise in new seed cotton prices.
2) The proportion of warehouse receipts is low, indicating that cotton inventories are at a low level.
3) Spinning mills have a strong willingness to replenish cotton inventories, spinning mill profits remain, and downstream demand is good.
4) The off-season is about to end, and the arrival of the "golden September and silver October" will stimulate demand.
Bearish factors:
1) The relationship between China and the US is relatively tense, and the possibility of future repair is not high, facing a more complex environment.
2) Bulk commodities may experience a sharp correction, and the export order index of foreign demand has fallen for four consecutive months.
3) The domestic epidemic has been relatively serious recently, affecting market sentiment.
4) The current cotton price is at a high level, and the risk is relatively high.
Core Logic: The time of the global economic upturn cycle has not yet arrived, the upturn has not ended, global liquidity has not shrunk, and the economic top has not yet appeared; downstream profits are good, and demand is steadily improving; however, the resurgence of the epidemic at home and abroad, and whether the off-season is not weak market is due to the market placing orders in advance, leading to a weak peak season.
Variables to Watch: Epidemic; Weather; US-China trade relations
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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