Tongzhou Cotton Market Brief, Week 3 of May 2023

I. Zhengmian (China's cotton futures contract)
(I) Positive Factors
1) The USDA's first release of the global supply and demand outlook for the 23/24 season shows a significant improvement in China's supply and demand situation. The stock-to-sales ratio has been lowered from 107.7% to 102%, indicating a clear improvement in the supply and demand outlook for the coming year.
2) With confirmed production reductions this year and ginning capacity remaining unchanged year-on-year, accelerated harvesting has become a market consensus.
3) Currently, downstream yarn mills maintain normal raw material inventories. If futures prices fall sharply, yarn mills will have replenishment needs. It is understood that yarn mills have placed orders around 15000.
(II) Negative Factors
1) Under the influence of Xinjiang cotton restrictions, the upward pressure on Zhengmian is very significant. When prices rise by more than 1% above the tariff price, the import cotton window opens, putting significant pressure on futures.
2) Although supply has decreased, prices have risen by 2000 yuan/ton from the low point of 14000 yuan/ton. The market has fully reacted to the short-term weather factors.
3) Entering the latter half of May, the downstream gradually enters the off-season, and consumer demand is declining compared to the previous period. There are no bright spots in terms of consumption.
II. US Cotton
(I) Positive Factors
1) The USDA increased the forecast for exports this year, significantly improving the stock-to-sales ratio, lowering it by 5 percentage points.
2) With La Niña rapidly transitioning to El Niño, there is a possibility of delaying the Indian monsoon and reducing rainfall.
3) Southeast Asian consumer countries have low raw material inventories. Later, as the destocking cycle in Europe and the United States ends, there will be replenishment needs in Southeast Asia.
(II) Negative Factors
1) The US debt ceiling issue is approaching, and its impact is increasing. The 1-3 month US Treasury yields maturing around June this year have soared to over 5.7%, far exceeding the policy interest rate level.
2) Heavy rains in Texas over the weekend continue to improve drought conditions, gradually debunking weather speculation.
3) Downstream operations in Southeast Asian countries are still relatively poor, exports have not improved, and the destocking cycle in the European and American markets has not yet ended.
 
Focus: Weather premium
 

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Tongzhou Cotton Market Brief, Week 2 of May 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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