Tongzhou Cotton Market Brief, Week 2 of April 2023

I. Zhengmian (China's cotton)
(1) Positive factors
1) The supply and demand pattern for the new year is expected to improve compared to this year. On the supply side, Xinjiang's cotton production has decreased despite a reduction in planting area. On the demand side, domestic consumption is steadily recovering, and the overseas destocking cycle is expected to end in the new year, leading to a recovery in demand and an overall improvement in the supply and demand situation.
2) The "more monks than rice" situation in the new year's acquisition pattern remains unchanged, increasing the likelihood of a rush to acquire cotton.
3) As Xinjiang enters the planting season in late April, the delayed implementation of the target subsidy policy, coupled with the government's mandatory increase in grain planting area, has become a short-term positive factor for reduced supply.
(2) Negative factors
1) The domestic supply and demand balance sheet for this year is loose, with the inventory-sales ratio for the 22/23 year at 109%, 10 percentage points higher than the five-year average.
2) Downstream operations are showing signs of weakening, and transactions are gradually slowing down. Yarn mills' finished goods inventories have accumulated slightly for four consecutive weeks, and fabric mills' operating rates have decreased for three consecutive weeks, with the most significant decline in Guangdong. Downstream consumption is gradually shifting towards the off-season.
3) Macroeconomic divergence between domestic and international markets. The international macroeconomic situation is marginally downward, hindering the strength of domestic recovery. If a major crisis occurs, no country will be immune.
II. US Cotton
(1) Positive factors
1) Contracts for US cotton this year have been completed, and it is currently in an oversold state. The shipping progress is also normal. If the average transportation capacity of previous years is maintained, US cotton will be able to achieve its contract target this year.
2) The drought in Texas improved slightly last week compared to the previous week, with the severe drought index falling from 46 to 45. However, the overall drought situation is the third most severe in the past ten years. According to the US Meteorological Agency's forecast, there will be no significant improvement before June.
3) As of the end of March, India's cotton arrivals totaled 3.01 million tons, with a cumulative arrival rate of 56%, significantly lower than the historical normal level of 80%. India's cotton production issues still require continuous attention.
(2) Negative factors
1) The US ISM Manufacturing PMI fell to 46.3 in March, marking the fifth consecutive month of contraction. The data indicates that rising interest rates, heightened recession fears, and tighter lending conditions may begin to put pressure on business investment.
2) As of the latest data, cumulative sales of US cotton for the 23/24 marketing year reached 316,000 tons, the slowest in the past five years, indicating weak demand for US cotton in the new year.
3) The proportion of long positions held by funds in US cotton remains negative, indicating that funds do not consider cotton as an overweighted asset.
Note: USDA monthly report released this Tuesday

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Tongzhou Cotton Market Brief, 3rd week of April 2023

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Tongzhou Cotton Market Brief, Week 1 of April 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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