Tongzhou Cotton Market Brief, Week 2 of July 2024

I. Zhengmian (China's cotton futures contract)
(1) Positive Factors
1) After downstream companies reduced production and operating rates, inventories of finished products at some yarn mills have begun to decline, and the contradiction is gradually being resolved. Yarn mills' immediate profits have turned positive, and the worst phase of the industry has passed.
2) As July approaches, the time for downstream companies to stock up for autumn and winter clothing is nearing. Raw material inventories at both textile mills and yarn mills are at historically low levels, leading to significant raw material demand when demand improves.
3) The domestic oversupply situation has temporarily manifested, and cotton prices have fallen below the average level, gradually entering a low valuation. From a valuation perspective, it is gradually entering a value investment phase.
(2) Negative Factors
1) Large unsold cotton holders upstream are expected to sell in a concentrated manner at the end of July and early August. This is partly due to upcoming option expirations and partly due to the relatively certain expectation of a bumper harvest next year, which will increase supply pressure in the future.
2) Downstream companies have shown no signs of starting up in July. This year's summer temperatures are higher than usual, and the stocking time for autumn and winter clothing is expected to be delayed.
3) In the past two weeks, the import window for yarn has opened, increasing the supply of imported yarn in the market.
II. US Cotton
(1) Positive Factors
1) Hurricanes have been unusually active in the US this year. After cotton prices fell to a low valuation of 70 cents per pound, be wary of subsequent weather speculation.
2) Recently, the operating rates of Vietnam and India have been rising, and prices near 70 cents per pound in the US market will stimulate some demand.
3) Southeast Asian garment exports improved month-on-month in May, confirming that the replenishment of US inventories is slowly beginning.
(2) Negative Factors
1) Texas still experienced rainfall this week, which helps alleviate the impact of high temperatures and improve soil moisture.
2) The recent acceleration of the monsoon in India has also brought above-average rainfall, which is beneficial for planting and growth.
3) The basis for foreign cotton continues to decline, and the pressure of spot sales is obvious. In the future, as Brazil's large supply enters the market, the pressure will increase.
Focus: US weather

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Tongzhou Cotton Market Brief, Week 1 of July 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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