Tongzhou Cotton Market Brief, Week 2 of October 2022
I. Zhengzhou Cotton
(1) Positive factors
1) During the National Day holiday, Xinjiang's epidemic control measures intensified, delaying the purchase of cotton for the new year and exacerbating the shortage of spot goods.
2) Raw material inventories of spinning mills have fallen to their historical lows. Around the 20th, many spinning mills experienced severe shortages and had a rigid need for inventory replenishment.
3) The current cotton price is in an undervalued range, with limited downside potential. From a long-term investment perspective, cotton is suitable for overweight allocation in asset allocation.
(2) Negative factors
1) From the demand side, during the National Day holiday, the operating rates of spinning mills and weaving mills fell sharply again, and the finished goods inventory of spinning mills accumulated again, marking the complete end of the "golden September and silver October" market.
2) Currently, the severe epidemic situation in Xinjiang restricts movement between towns. Under the control situation, cotton farmers have limited time to negotiate, which benefits the pricing power of cotton ginning plants.
3) A large-scale cotton purchase is about to begin. Based on the lessons learned last year, cotton ginning plants will actively hedge during the purchase period, putting enormous pressure on the market.
II. American Cotton
(1) Positive factors
1) American cotton fell to its previous low point of 82, and the trapped long positions that were previously shorted were liquidated, supporting the cotton price.
2) Recently, American cotton is closely related to the macroeconomic environment. The surge in crude oil prices has driven up the price of American cotton.
3) From a technical perspective, American cotton shows a bottom divergence, indicating a rebound demand.
(2) Negative factors
1) The expectation of the Federal Reserve's interest rate hike continues to strengthen, which is bearish for global commodities in the face of already high interest rates.
2) The operating rates of Southeast Asian markets generally do not exceed 50%, and spinning mills in India and Vietnam are still in a state of huge losses.
3) Vietnam and Bangladesh's exports peaked in September, confirming a decline in overseas demand.
Focus: Opening price
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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