Tongzhou Market Information Brief, Week 2 of September 2021
I. American Cotton
Positive Factors:
1) The US employment performance was below expectations, delaying the pace of US economic recovery.
2) There is a high probability of China's cotton reserve purchase, which is beneficial to US cotton exports.
Negative Factors:
1) Both the US PPI and CPI are at historical highs.
2) The USDA September report increased US cotton production by 267,000 tons, with the latest September production at 4.03 million tons.
3) The net long position of the US cotton fund is at a historical high, with limited upside potential.
II. Zhengzhou Cotton
Positive Factors:
1) The increase in cotton production costs and the expansion of ginning capacity are established facts. The upcoming new cotton will definitely support prices in the short term.
2) Traditional peak season. The strength of downstream orders is uncertain. If the peak season recovers, inventory will be digested.
Negative Factors:
1) Policy regulation is certain; the national level aims to prevent excessively high cotton prices.
2) Due to the dual control policy, cities like Nantong experienced production shutdowns for nearly 20 days, which will affect cotton demand in the short term.
3) The operating rate of textile mills continues to decline, with both yarn mills and textile mills reducing raw material inventory and accumulating finished product inventory. Profits at yarn mills and textile mills are shrinking.
4) Starting September 6th, reserve cotton began to increase resource allocation, with a total of 15,000 tons being released. This national policy aims to control prices.
Core Logic: Firstly, from the policy side, the state is restricting the bidding units for reserve cotton release and increasing the release volume to limit excessively high cotton prices. Secondly, downstream yarn mills and textile mills have poor orders and are reducing raw material inventories while accumulating finished product inventories. Finally, the historically high cotton prices are a negative factor for cotton.
Variables to Watch: Purchasing progress; US hurricanes
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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