Tongzhou Cotton Market Brief, 3rd week of January 2023

I. Zhengmian (China's cotton futures contract)
(I) Positive Factors
1) The Renminbi continues to appreciate significantly. Domestic and international markets are optimistic about China's economic performance in 2023 after the easing of the epidemic, with a projected GDP target of 5-5.5%.
2) Overall inventory of yarn mills remains low, orders are good, and a wave of replenishment is expected after the holiday.
3) The National Cotton Market Inspection System's November survey predicts that China's cotton planting intentions in 2023 will decrease by 3.5% year-on-year.
(II) Negative Factors
1) In 2023, the economic vitality of Europe and the United States is suppressed under high interest rates, and the foreign economy continues to decline. Domestic exports are declining, the real estate market is sluggish, local finances are tight, and residents' incomes have not increased, so it is not advisable to be overly optimistic about domestic recovery in 2023.
2) China's exports to the US are showing a downward trend, especially a rapid decline in China's share in 2022, with the phenomenon of capacity transfer to Southeast Asia being evident.
3) Xinjiang's current acquisition volume has reached 6.1 million tons. Under the double blow of inventory reduction at the end-consumer level in Europe and America and the Xinjiang ban, the domestic supply and demand situation in the 22/23 year will be loose.
II. American Cotton
(I) Positive Factors
1) Soil moisture conditions in Texas have not improved significantly. If there are problems with the weather, American cotton production remains a concern.
2) In terms of fund allocation, American cotton is an over-allocated variety, with net long positions among funds increasing by 1 percentage point to 10% month-on-month.
3) The current cotton-grain price ratio is too low, coupled with increased production costs, which is not conducive to cotton planting next year. According to a recent survey by the Cotton Grower magazine, the next year's planting area is expected to decrease by 7%.
(II) Negative Factors
1) The US has not stopped raising interest rates, and high interest rates have dealt a substantial blow to the real economy, and the probability of the economy falling into a mild recession in the future is relatively high.
2) Due to US interest rate hikes, Southeast Asian countries are experiencing foreign exchange shortages, and problems with letters of credit have forced importing countries to reduce their demand for American cotton.
3) With no major changes in global supply, the inventory of clothing at the end consumer level in Europe and the United States still needs a nearly six-month liquidation cycle.
Focus: Domestic consumption after the festival
 

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Tongzhou Cotton Market Brief, Week 4, January 2023

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Tongzhou Cotton Market Brief, Week 2 of January 2023

Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance

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.

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Leaders from Xiamen C&D Group visited Tongzhou for investigation and guidance
Tongzhou Cotton Market Brief, Week 1 of March 2025

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.

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Tongzhou Cotton Market Brief, Week 1 of March 2025
In 2024, China's exports of dyed and printed fabrics to Vietnam and Bangladesh increased significantly.

In 2024, China's exports of dyed and printed fabrics to Vietnam and Bangladesh increased significantly.

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.

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In 2024, China's exports of dyed and printed fabrics to Vietnam and Bangladesh increased significantly.
President Huang Hongyu was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference

President Huang Hongyu was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference

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.

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President Huang Hongyu was invited to attend the 2025 Zhangjiagang Cotton Industry Development Conference

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