Tongzhou Cotton Market Brief, 3rd Week 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 factories have begun to decline, and contradictions are gradually being resolved. Yarn factory profits have turned positive, and the worst phase of the industry has passed.
2) The Third Plenum of the 19th Central Committee of the Communist Party of China was held this week. The Third Plenum has historically held significant importance, and therefore, the release of macroeconomic policies will help boost commodity sentiment.
3) US cotton has strong support at 70 cents. If the US cotton weather continues to deteriorate, the rise in US cotton will drive up Zhengmian.
(2) Negative Factors
1) Large unsold cotton holders in the upstream are expected to sell in late July and early August. This is partly due to upcoming option expiration and partly due to the fairly certain expectation of a bumper harvest next year. The future supply pressure will increase.
2) Downstream orders have not improved so far. In reality, yarn prices are still falling, and orders are significantly below the same period last year.
3) The off-season demand in June led to a reversal of Xinjiang's inventory, changing from a year-on-year decrease to a year-on-year increase of 100,000 tons. The tight supply situation is gradually easing.
II. US Cotton
(1) Positive Factors
1) The US cotton's recent drought index and good rate have continued to decline. If there is no effective rainfall in the future, there is still room for adjustment in US cotton production.
2) Recently, the operating rates of Vietnam and India have been rising, and prices near 70 cents in the US market will stimulate some demand.
3) The July report lowered the initial inventory of India. The Indian balance sheet was tightened again. Coupled with the MSP policy, India's support for external markets has been strengthened.
(2) Negative Factors
1) The recent acceleration of the monsoon in India has also brought above-average rainfall, which is beneficial to planting and growth.
2) Funds have maintained a long-term short position in US cotton. The net long position of funds fell by 3 percentage points week-on-week to -11%.
3) The sales progress of the new US cotton crop is at the third-lowest level in the past ten years, and there is still considerable pressure on the new crop sales.
Focus: US weather
 

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Tongzhou Cotton Market Brief, Week 2 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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