Tongzhou Market Information Brief, Week 1 of January 2022
I. Zhengmian (China Cotton Futures Contract)
(1) Positive Factors
1) The logic of cost support remains strong, and ginneries have a strong willingness to maintain prices.
2) Ginneries currently have little repayment pressure and are not under significant financial pressure.
3) The industrial sector has seen downstream replenishment of demand, and a positive outlook for a small spring rally after the New Year.
(2) Negative Factors
1) On the macro level, domestic consumption is not strong, and the overall economic downturn is driving down the center of gravity of Zhengmian.
2) Downstream users cannot accept the high cotton price; yarn mills are operating at a loss on a point-to-point basis, and the high cotton price cannot be passed on.
3) Insufficient downstream orders, no seasonal pre-holiday restocking, and weak downstream demand.
4) The Xinjiang ban has forced some companies to change their cotton structure.
5) The substitution effect of Southeast Asian countries such as Vietnam and India is significant.
II. US Cotton
(1) Positive Factors
1) Strong US economic consumption demand; clothing sales during the Christmas period increased by 47% year-on-year, data verifying that the US economy remains strong.
2) Vietnam, Pakistan, and India's yarn mills are operating well, demand is strong, and orders generally extend to January. Strong overseas market demand increases demand for US cotton.
3) Strong market speculation; the latest fund net long ratio rose to 36.18%, still the highest for the same period in history.
(2) Negative Factors
1) High inflation and expectations of monetary tightening by the Federal Reserve.
2) High cotton prices increase expectations of increased production next year.
3) Recently, the US reported nearly one million new cases of COVID-19 per day, with Omicron infections accounting for over 95%.
Summary: Judging from US Christmas consumption, US retail sales increased by 8.5% compared to the same period in 2020, the largest increase in 17 years, with clothing sales up 47% year-on-year. Data verifies that the US economy remains strong. Demand-wise, Indian and Vietnamese yarn mills are still operating well, and demand remains strong, so US cotton demand remains strong. Domestically, driven by US cotton and the January delivery issue, Zhengmian's performance remains strong in the short term, and the short-term bearish turning point has not yet arrived. Downstream this week, due to restocking by traders and fabric mills, yarn sales have loosened slightly, and post-holiday restocking will also provide some support to the market. Short-term trading should focus on intraday short longs.
Points to Watch: Changes in downstream consumption; assessment of the impact of Omicron
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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