Tongzhou Cotton Market Brief, 3rd week of January 2024

I. Zhengmian (China's cotton futures contract)
(I) Positive Factors
1) Downstream operations have continued to improve recently, with spinning mills and weaving mills increasing their operating rates. Finished goods inventories have continuously been depleted and are now at a low level. With expectations for next year, downstream improvement continues before the New Year.
2) From a seasonal perspective, downstream operations improve every year after the Lunar New Year, experiencing a so-called "small spring recovery." Therefore, there are still downstream expectations.
3) Domestic orders from overseas are gradually increasing, suggesting that some European and American brands may be entering a restocking period. Terminal orders are expected to improve in 2024.
(II) Negative Factors
1) Currently, the industry's operations are mostly driven by stocking activities from weaving mills and traders. Whether the "golden March and silver April" (a period of high demand) will actually arrive remains to be seen. If the peak season fails to materialize, the current cotton price would not be supported given the existing supply-demand situation.
2) Weaving mills' raw material inventories have been replenished to the highest level for the same period in history after a month and a half of replenishment; the replenishment phase is nearing its end.
3) Ginning mills' hedging (main force) have not yet entered the market. If the market price rises to 16000, it could unlock most Xinjiang ginning mills.
II. US Cotton
(I) Positive Factors
1) Starting in the fourth quarter of 2023, the overseas market received orders for clothing from European and American brands. Some brands have gone through a destocking period of about a year and a half, and inventories have returned to normal levels.
2) Currently, Brazilian and Australian cotton sales are nearing completion. Entering 2024, the main global supply will only be US cotton.
3) Southeast Asia, after a year and a half of loss-making operations, has low raw material and finished goods inventories. If overseas markets enter a restocking period, overseas demand will increase rapidly.
(II) Negative Factors
1) Under the influence of El Niño in 2024, US cotton production is expected to recover next year.
2) Recently, although some clothing orders from Europe and America have been placed, order prices are very low, and factories' profit margins cannot be expanded. Although demand has improved, it is still weak.
3) This year, expectations for increased planting in Brazil are strong, and next year's Brazilian production is expected to increase further, squeezing the US cotton export market.
Points to Watch: The sustainability of downstream improvement
 
 

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Tongzhou Cotton Market Brief, 4th Week of January 2024

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Tongzhou Cotton Market Brief, Week 2 of January 2024

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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