Tongzhou Market Information Brief, Week 4 of August 2021
I. US Cotton
Positive factors:
1) US liquidity has not yet contracted.
2) USDA lowered US cotton production by 120,000 tons in August.
3) September is the hurricane season in the US, which may affect US cotton production.
4) Consumption in Europe and the US is still recovering.
Negative factors:
1) The Federal Reserve has determined the Taper time, and will confirm the balance sheet reduction by the end of this year.
2) The US good rate is currently at an absolute historical high, and the growth situation is good.
3) The first phase of the China-US agreement is about to expire, and the export situation of US cotton depends on the China-US relationship.
II. Zhengzhou Cotton
Positive factors:
1) Cotton is about to be listed, and the mood of rushing to harvest is getting stronger.
2) The cost of cotton planting has increased, and the price increase has become a fact.
3) Downstream still has profit.
Negative factors:
1) The domestic economy lacks strong endogenous driving force.
2) Cotton is in a historically high valuation range.
3) This week, the phenomenon of a decrease in the opening rate and an increase in finished product inventory has appeared.
4) Domestic orders for overseas orders or advance digestion of traditional peak season orders "peak season is not peak".
Core logic: In the short term, cotton harvesting is speeding up on the supply side, production costs are increasing, cotton gins are expanding production capacity, downstream inventories are still low on the demand side, and profits are good in the short term, so Zhengzhou cotton has support below; In the long term, the domestic economy lacks momentum, and the three carriages are lacking power; Zhengzhou cotton is at an absolute historical high, the valuation is too high, above 17500 only appeared in one month of 2018; the downstream has begun to reduce yarn prices; foreign orders have been placed in advance, and the peak season is not peak; high ocean freight costs, Zhengzhou cotton will fall back after a sharp rise in the long term.
Variables to watch: Epidemic; 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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