Tongzhou Market Information Brief, Week 3 of October 2021
I. US Cotton
Positive Factors:
1) USDA's October report lowered production by 110,000 tons to 3.92 million tons.
2) China's trade relations are expected to ease, leading to increased imports of US cotton.
3) China increases import quotas.
4) The price difference between US cotton and Zhengzhou cotton is at a historical high.
Negative Factors:
1) The US recently announced that the Producer Price Index (PPI) for September was 8.6%, and the Consumer Price Index (CPI) was 5.4%, with inflation at a historic high, and the Federal Reserve is about to implement tapering.
2) The latest net long position of funds is 39%, slightly lower than last week, but still at a historically high level.
II. Zhengzhou Cotton
Positive Factors:
1) Ginning factories are rushing to harvest, and the contradiction of excess capacity cannot be solved in the short term.
2) The basis is too large, and the futures and spot must return to equilibrium; the futures price will inevitably approach the spot price.
Negative Factors:
1) Starting October 8, the government increased the daily amount of cotton released from reserves to 25,000 tons.
2) Increase import quotas.
3) Downstream transmission is not smooth, and downstream yarn factories are experiencing negative immediate profits.
Summary: Currently, the spot price of cotton is mainly determined by the rush harvest and planting costs. Ginning factories are scrambling for cotton, causing cotton prices to keep rising. The price of seed cotton once rose to 11 yuan/kg, but fell slightly in the following days. In the short term, cotton prices have support from below, but when the acquisition progress reaches 50%, the cost is determined, and that's when cotton prices will begin to fall.
Focus Points: Acquisition progress, seed cotton price
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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