Tongzhou Market Information Brief, Week 2 of November 2021
I. US Cotton
Positive Factors:
1) Slow progress in US cotton listing, actual market supply is less than the same period of previous years, supporting cotton prices.
2) The proportion of on-call for December US cotton contracts is still rising recently, reaching the highest level for the same period in history.
3) The price difference between domestic and foreign markets has recently fallen slightly, but it is still at a historically high level.
Negative Factors:
1) The number of countries importing US cotton is declining.
2) US cotton production increased by approximately 22.95% compared to last year.
3) Net long positions of funds have been declining for three consecutive weeks, and the latest decline is to 36%.
II. Zhengzhou Cotton
Positive Factors:
1) Severe contango, excessive backwardation in futures market.
2) Downstream power rationing policy has been slightly relaxed, and the operating rate has slightly increased.
3) Downstream companies will prepare for Spring Festival orders in November and replenish inventories.
Negative Factors:
1) Policy level may release imported cotton, the improved quality of released cotton delays the time for downstream companies to receive new cotton.
2) The profit of spinning mills from point-to-point is negative due to the excessively high cotton price, which is unacceptable to downstream companies.
3) With the acceleration of Xinjiang cotton procurement, the procurement price of cotton continues to weaken, and the cost price shifts slightly downward.
4) Adjustment of the selling price of government-reserved cotton has improved the transaction rate of domestic cotton and further increased the market supply.
Summary: With the acceleration of Xinjiang cotton procurement, the procurement price is basically determined. Whether the future price can remain high depends mainly on the acceptance level of downstream companies. However, firstly, the policy level is to control cotton prices. This week, rumors spread in the market that imported cotton will be released. If it is true, the time for downstream companies to receive new cotton may be delayed; secondly, the current point-to-point profit of spinning mills is negative, and the excessively high cotton price is unacceptable to spinning mills. In the future, if there are no major negative macroeconomic factors, the cotton price will have support in the short term, but in the long term, it will depend on whether downstream consumption can support the cotton price.
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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