Tongzhou Cotton Market Brief, Week 4 of March 2024

I. Zhengmian (China's cotton futures contract)
(1) Positive Factors
1) During the Two Sessions, the CPI target for this year was set at 3%, which implies a policy bias towards inflation in terms of overall prices this year.
2) Domestic yarn mills have extremely low raw material inventories, and the demand for yarn mills to buy at low prices is still there. In addition, the proportion of pricing later this year is still relatively high.
3) After entering April, we will gradually pay attention to the convergence of basis. Currently, the willingness of upstream companies to maintain prices is still very strong, and there is a need to close the basis in April.
(2) Negative Factors
1) From the demand side, downstream demand has clearly weakened, especially as the Qingming Festival is the turning point between the peak and off-peak seasons. The downstream sector is entering the off-season, yarn mills are accumulating inventory faster, and there is a risk of reduced operating rates in the future, leading to a decline in cotton consumption.
2) There is great hedging pressure from above. Most companies must reach their cost line before hedging, so there is heavy pressure on cotton prices from above.
3) From the supply side, the total supply this year is not lacking, and structural contradictions do not determine the trend.
II. US Cotton
(1) Positive Factors
1) US cotton warehouse receipts have been increasing recently, but the absolute value is only 10,000 tons, which is still at an absolute low in recent years, so the risk of a short squeeze has not been alleviated.
2) The weekly shipment volume of US cotton is large, and the shipment progress is higher than the five-year average, and the low end-of-year inventory of US cotton has not been alleviated in the future.
3) US cotton holdings of 271,000 lots are still at a historical high, and the game of US cotton has not ended.
(2) Negative Factors
1) Recently, US cotton warehouse receipts have been increasing continuously, and the growth rate is relatively fast, and the risk of a short squeeze is gradually easing.
2) The net long position of US cotton funds has been declining in the past two weeks, and long positions of funds have temporarily shown signs of exiting. The latest week-on-week decline was 2 percentage points to 33%.
3) This week, total holdings reduced by 4,000 lots and prices fell, indicating that long positions exited this week.
Focus: The sustainability of the improvement in downstream demand after the New Year
 

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Tongzhou Cotton Market Brief, Week 1 of April 2024

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Tongzhou Cotton Market Brief, Week 3 of March 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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