Tongzhou Cotton Market Brief, Week 1 of June 2024

I. Zhengmian (China's cotton futures contract)
(1) Positive Factors
1) The current valuation of yarn prices is low, with some yarn counts even returning to last year's lows. Therefore, further price declines would justify stockpiling.
2) Since the beginning of the year, fabric mills' raw material inventories have been declining and are currently at a low level. In late June, fabric mills need to stock up for autumn and winter clothing.
3) The peak of US interest rates has been seen, and as interest rates are lowered, market pressure will decrease. Domestic policies are also guiding towards inflation. Therefore, from a macroeconomic perspective, buying on dips has a high margin of safety.
(2) Negative Factors
1) The weather in Xinjiang and other major cotton-producing regions globally has been favorable, suggesting a high probability of a bumper harvest in the 2024/2025 season, which will inevitably put pressure on cotton prices.
2) With the certainty of a bumper harvest next year, Xinjiang's large cotton holders are under increased psychological pressure. Holding costs and the obvious future bumper harvest have led to some easing of sentiment.
3) The operating rate of downstream textile mills has rapidly declined, and yarn inventories have rapidly accumulated to more than one month. Downstream demand is expected to continue weakening in June.
II. US Cotton
(1) Positive Factors
1) Texas has entered a period of weather speculation. In June and July, the market is highly sensitive to weather, and this is even more important in years when El Niño transitions to La Niña.
2) Long positions by funds have re-entered the market. As of May 28, the net long position of funds has risen from 0% to 3%.
3) The valuation of the July US cotton contract has entered the low-to-mid range, and with extremely low end-of-season inventories, the current price does not match the extremely low inventory-sales ratio.
(2) Negative Factors
1) Texas still experienced rainfall this week, which helped alleviate the impact of high temperatures and improve soil moisture.
2) With supply growth exceeding demand growth next year, it is more reasonable for US cotton prices to trade below the average.
3) To date, weather conditions in the US and Brazil continue to favor cotton production; there are no weather problems.
Focus: US weather

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Tongzhou Cotton Market Brief, 3rd week of June 2024

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Tongzhou Cotton Market Brief, Week 4 of May 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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