Tongzhou Cotton Market Brief, Week 4 of June 2024

1. Zhengzhou Cotton
(1) Positive Factors
1) After downstream companies limited production and reduced operating rates, the finished goods inventory of some yarn mills has begun to decline, and the contradiction is gradually being resolved. Moreover, the immediate profit of yarn mills has turned positive, and the worst stage of the industry has passed for now.
2) Downstream raw material inventories are extremely low. Cotton inventories of yarn mills and cotton yarn inventories of fabric mills are at very low levels. If demand improves, replenishment demand will be large.
3) The high point of interest rates in the US has been observed. In the future, as interest rates are lowered, market pressure will decrease, and domestic policies will also be guided 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 relatively good. The 2024/2025 season will most likely be a bumper year, putting pressure on cotton prices.
2) As prices continue to fall, the pressure on unsold resources held by upstream major players is increasing, as well as the pressure to maintain collateral. There is a possibility of them selling off their goods in the future.
3) The downstream market has entered a significant off-season. After the reduction in operating rates of yarn mills, cotton usage has decreased, and inventories have increased, leading to reduced cotton purchases by yarn mills.
2. American Cotton
(1) Positive Factors
1) India's MSP for the 2024/2025 season was raised by 7.5%, equivalent to 91 US cents. India's MSP will support the US market through India-US spot trade flows.
2) American cotton has entered an undervaluation range, and Southeast Asian countries are showing a strong willingness to price below 70, with a significant improvement in immediate profits.
3) Based on the current price difference between domestic and international markets, foreign cotton still has a competitive advantage; foreign cotton has a higher cost-effectiveness compared to Zhengzhou cotton.
(2) Negative Factors
1) Texas continues to experience rainfall this week, which helps alleviate the impact of high temperatures and improve soil moisture.
2) There are no highlights in Southeast Asian demand; yarn prices in Pakistan and Vietnam continue to decline, and demand remains weak.
3) To date, the weather in the United States and Brazil continues to be favorable for cotton production. There are no weather problems.
Points to Watch: US weather
 

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Tongzhou Cotton Market Brief, Week 1 of July 2024

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Tongzhou Cotton Market Brief, 3rd week of June 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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