Tongzhou Cotton Market Brief, Week 3 of September 2022
I. Zhengzhou Cotton
(I) Positive Factors
1) Currently, the supply side is relatively tight. On the one hand, old cotton is mainly concentrated in the Xinjiang Production and Construction Corps and several large factories. On the other hand, the acquisition of new cotton is delayed due to the epidemic, so the supply side will remain relatively tight in the short term.
2) The price difference between domestic and international markets is still at a historical high. Considering the divergence of economic cycles at home and abroad, and the expectation that China's overall economic environment will be better than that of other countries in the future, many funds are engaging in arbitrage between domestic and international markets, which is conducive to the rise of domestic cotton prices.
3) Cotton has a relatively low valuation in the agricultural products sector, with a deeper decline than other agricultural products, making it suitable for overweighting in fund allocation strategies.
(II) Negative Factors
1) From the demand side, the peak season of September and October has fallen short of expectations, and downstream sales have slowed significantly after the Mid-Autumn Festival holiday. This wave of downstream stocking may be facing a turning point.
2) Based on last year's experience, cotton ginning factories have strengthened their risk awareness. During the acquisition of new cotton, they hedge while acquiring, putting enormous pressure on the futures market.
3) Sanctions imposed by Europe and the United States on Xinjiang cotton require long-term attention and have a profound impact on Xinjiang cotton consumption.
II. US Cotton
(I) Positive Factors
1) The ability to control the overseas market is relatively strong. In order to continue selling smoothly, international cotton traders may raise US cotton prices again.
2) This year is a hurricane season. If hurricanes make landfall later, it may trigger market fluctuations in the short term.
3) Beware of a repeat of the December short squeeze. Currently, the number of unpriced contracts for December is 53,000, accounting for 31%, the highest in history.
(II) Negative Factors
1) From the supply side, the global hype of positive factors has ended, and the positive factors have been exhausted. The supply of the Northern Hemisphere is about to be listed, and the supply side is gradually easing.
2) From the demand side, the operating rate of the Indian market continues to decline, reaching a historical low, and overseas consumption is continuously declining.
3) Non-commercial long positions continue to decline, decreasing by 2,500 this week, and the net long proportion of funds decreased by 1 percentage point week-on-week.
Points to Watch: Opening price; Downstream orders
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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