2024 Chairman's Dialogue: Following Price Development Laws, Trading Strategies to Boost Enterprise Development
On May 30, 2024, the 2024 China Cotton Industry Development Summit Forum was successfully held in Xi'an, Shaanxi. In the afternoon's roundtable forum session, industry representatives held a lively and in-depth discussion on the topic of "20 Years of Review and Prospect of Cotton Futures Serving High-Quality Industrial Development."
Regarding experience and insights on cotton futures serving the industry, Wei Gangmin, chairman of Henan Tongzhou Cotton Industry Co., Ltd., stated that Tongzhou Cotton's approach is professionalization, industrialization, and internationalization. The company's ability to complete the entire industrial development process, from upstream planting to acquisition, processing, cotton trading, textiles, weaving, and clothing, is inseparable from the research and application of cotton futures. Tongzhou's continued success is due to its consistent use of the laws of futures price fluctuations to identify strategic opportunities. The company has achieved profitability by capturing undervalued cotton futures at several key junctures, or hedging against risks during periods of high valuation, thus achieving rapid development.
Currently, there are three main dimensions to the fluctuating factors in cotton prices: firstly, the macro dimension, including global economic expansion and contraction, policy-based interest rate hikes and cuts, consumption, and export trade; secondly, the industrial dimension, where industrial development is upward, but production capacity is shrinking; and thirdly, the trading dimension, where a significant bull market may emerge when cotton supply and demand show supply tension, upward demand, or policy-driven market conditions, making it inadvisable to easily engage in hedging and offsetting. In the market, we mainly observe the performance of trading counterparts, looking for opportunities where counterparts make mistakes—selling high and buying low—to establish our own profit model. This process has involved many setbacks, but through continuous encouragement and practice, we strive to improve our strategies and continue to survive.
Regarding the current market outlook, the average futures price over the past ten years has been approximately 15,100-15,200 yuan/ton. The current price is around 15,500 yuan/ton, slightly above the ten-year average; at this level, we will hedge our current inventory.
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.
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.
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.
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.
Henan Tongzhou Cotton Industry Co., Ltd.
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Henan Tongzhou Cotton Industry Co., Ltd.
Address: 10th Floor, Henan Nongxin Building, No. 19 Commercial Outer Ring Road, Zhengdong New District,Zhengzhou, China
Tel：86037165836206
Email：tongzhou@tongzhoucotton.com
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