Tongzhou Market Information Brief, Week 3 of September 2021
I. US Cotton
Positive factors:
1) US August retail sales unexpectedly increased by 0.7%, the largest increase in five months, easing concerns about slowing economic growth.
2) There is a high probability of China's cotton reserves purchase, which is beneficial to US cotton exports.
Negative factors:
1) The US House of Representatives will vote on the debt ceiling issue this week, which will increase market risk aversion to some extent.
2) The USDA's September report increased US cotton production by 267,000 tons, with the latest September production at 4 million tons.
3) The net long position of US cotton funds is at a historical high, and there is not much room for upside.
II. Zhengzhou Cotton
Positive factors:
1) The increase in cotton production costs and the expansion of ginning capacity are established facts. The upcoming arrival of new cotton will inevitably 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) The Evergrande debt crisis may affect the liquidity of interbank funds, thus hindering China's economy to a certain extent.
2) Due to the dual control policy, Nantong and other regions have stopped production for nearly 20 days, which will affect cotton demand in the short term.
3) Expectations of a traditional peak season in the downstream market have been dashed, with yarn prices and profits both shrinking, spinning mills and weaving mills reducing operating rates, and finished goods accumulating.
Core logic: On the macro level, the US debt ceiling and the domestic Evergrande debt crisis have increased market risk aversion; in the domestic cotton market, some areas have already started weighing in small quantities, and new cotton will be listed on a large scale before and after "National Day". At the policy level, the state aims to control the price of new cotton; at the downstream level, the peak season is not strong, the peak season expectations have been dashed, and yarn and cloth have accumulated inventory.
Variables to watch: Acquisition 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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