Tongzhou Market Information Brief, Week 4 of November 2021
I. US Cotton
Positive Factors:
1) Slow progress in US cotton listing, actual market supply is less than the same period in previous years, supporting cotton prices.
2) With the extension of cotton reserve sales, the possibility of the state reserve purchasing US cotton in the future increases, which is positive for US cotton prices.
3) Recently, the volume of contracts signed by Vietnam has been low. With the improvement of the epidemic situation in the future, Vietnam may increase the signing progress of US cotton.
4) The proportion of On-Call is high, which supports US cotton prices.
Negative Factors:
1) The main US cotton contract is at a historical high.
2) US cotton production has increased by about 22.95% compared to last year.
3) The high price of US cotton this year will lead to an increase in planting area next year.
II. Zhengzhou Cotton
Positive Factors:
1) Currently, there are only 137,800 tons of registered warehouse receipts for new cotton, which is the slowest progress in the past three years.
2) The second batch of reserve release has begun, and the state reserve needs to replenish the warehouse later.
3) Serious term inversion, contradictions remain unresolved.
Negative Factors:
1) The second batch of reserve release has begun, with a planned release of 600,000 tons, including Xinjiang cotton and imported cotton from 2019. The improvement in cotton quality has delayed the downstream's acceptance of new cotton.
2) Domestic sales are still poor, with the year-on-year growth rate of clothing, footwear, and textile retail sales in October being -3.3%.
3) Poor downstream demand, with yarn and fabric mills showing signs of price reductions. Currently, both yarn and fabric mills are operating at a negative profit.
4) Inventories of downstream yarn and fabric mills are at historical highs, and downstream transmission is not smooth.
Summary: Currently, the market is still heavily divided between bulls and bears. As can be seen from the holding volume of 423,700 lots in January, both sides have strong logic. The bulls are mainly trading on the logic of low warehouse receipts and serious contango, while the bears are mainly based on the poor downstream consumption situation and the inability to accept such high cotton prices. As the January contract approaches delivery, the market will show a clearer direction.
Points to Watch: Changes in terminal consumption; national policies
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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