Tongzhou Market Information Brief, Week 3 of August 2021
I. US Cotton
Positive Factors:
1) No upward trend observed in US and European inflation. Foreign assets, stock markets, commodities, and bond markets are all trending upwards.
2) USDA lowered global production by 120,000 tons, with a 120,000-ton reduction in US cotton production. The US cotton stock-to-sales ratio further decreased, which is positive for US cotton.
3) September is the US hurricane season, which may affect US cotton production.
4) Consumption in Europe and the US is still recovering.
Negative Factors:
1) US Producer Price Index (PPI) in July was 11.7%, a historical high, with commodities at historically high levels.
2) The US good condition rate is currently at an absolute historical high, indicating good growth conditions.
3) The Phase One trade deal between China and the US is about to expire, and the export situation of US cotton depends on the China-US relationship.
II. Zhengzhou Cotton
Positive Factors:
1) USDA lowered global production, and the stock-to-consumption ratio decreased by 6.39% year-on-year, which is positive for cotton prices.
2) Domestic cotton yarn consumption remains strongly supported, cotton yarn prices are firm, and market expectations for the future new cotton opening price are also high.
3) The off-season is about to end, and the arrival of the "golden September and silver October" will stimulate demand.
4) The epidemic situation in Vietnam is severe, and operations continue to decline. Ho Chi Minh City and its surrounding areas are severely affected, with most factories closed and a small number of factories operating at 30-60% capacity. Orders may return to China.
Negative Factors:
1) Cotton prices are at historical highs; avoid going long at high prices.
2) Yarn mills' profits have been declining recently.
3) China's social financing data in July fell significantly short of expectations, and the economy may be turning.
Core Logic: Currently, Zhengzhou cotton remains relatively strong and maintains an upward trend. On the one hand, from a global perspective, the USDA has lowered global production, and the stock-to-consumption ratio has decreased by 6.39% year-on-year, which is positive for cotton prices. On the other hand, domestic cotton yarn consumption remains strongly supported, cotton yarn prices are firm, and market expectations for the future new cotton opening price are also high. However, downstream fabric mill inventories have increased, and yarn mill profits have continued to decline. The phenomenon of a weak peak season after a period of high downstream profits is beginning to emerge.
Variables to Watch: Epidemic situation; Weather; China-US 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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