Tongzhou Market Information Brief, Week 1 of November 2021
I. US Cotton
Positive Factors:
1) As of now, the US government has not significantly tightened its fiscal policy, and there are no major macroeconomic negative factors.
2) China's contracted volume of US cotton remains high, supporting US cotton prices.
3) The on-call percentage of US cotton December contracts has been steadily rising recently.
Negative Factors:
1) The ten major importing countries of US cotton are showing a downward trend.
2) US cotton production has increased by approximately 22.95% compared to last year.
3) The net long position of funds has been declining for three consecutive weeks, recently falling to 36%.
II. Zhengzhou Cotton
Positive Factors:
1) Severe contango, with excessive discounts in the futures market.
2) Downstream power rationing policies have been slightly relaxed, and operating rates have slightly increased.
3) Downstream companies need to prepare for Spring Festival orders in November and replenish their inventories.
Negative Factors:
1) Policymakers may release imported cotton, and the improved quality of the released cotton may delay downstream companies' acceptance of new cotton.
2) The current cotton price results in negative point-to-point profits for spinning mills, which is unacceptable to downstream companies.
3) With the acceleration of cotton procurement in Xinjiang, the procurement price of raw cotton continues to weaken, and the cost price has slightly decreased.
Summary: With the acceleration of cotton procurement in Xinjiang, the procurement price has been basically determined. Whether the price can remain high in the future depends mainly on the acceptance level of downstream companies. However, firstly, policymakers need to regulate cotton prices. There are rumors this week that imported cotton will be released in the market. If true, it may delay the time for downstream companies to accept new cotton; secondly, the current point-to-point profit of spinning mills is negative, and the high cotton price is unacceptable to spinning mills. In the future, if there are no major macroeconomic negative factors, cotton prices will be supported in the short term, but the long-term trend will depend on whether downstream consumption can support cotton prices.
Focus: Changes in downstream power rationing
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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