Tongzhou Cotton Market Brief, Week 4 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, gradually resolving the contradiction. Moreover, yarn mills' immediate profits have turned positive, indicating that the worst phase of the industry's cyclical downturn has passed.
2) Currently, domestic valuations are not high. Under neutral to low valuations, improvement in industry margins is not suitable for short selling.
3) The support level of 70 cents per pound for US cotton is strong. If the weather continues to deteriorate, a rise in US cotton prices will drive up Zhengmian prices.
(2) Negative Factors
1) Large unsold cotton holders in the upstream are expected to sell their cotton in late July and early August. This is partly due to the impending expiration of options and partly due to the relatively certain expectation of a bumper harvest in the next year, which will put increasing pressure on future supply.
2) Downstream orders have not improved so far. According to our understanding, yarn prices are still falling, and orders are far below the same period last year.
3) The off-season demand in June led to a reversal of the situation in Xinjiang's cotton 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) On the demand side, prices near 70 cents per pound in the US market will stimulate some demand.
3) The July report lowered India's initial inventory, tightening India's balance sheet again. Coupled with the impact of the MSP policy, India's support for external markets has strengthened.
(2) Negative Factors
1) Starting last Wednesday and continuing through Monday and Tuesday of this week, Texas will receive good rainfall. Weather conditions are continuing to improve.
2) Funds have been shorting US cotton for a long time. The net long position of funds decreased by 1 percentage point week-over-week to -12%.
3) Overseas stock markets and commodities experienced significant declines last week, suggesting a potential logic of trading retrenchment overseas.
Points to Watch: US weather
 

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Tongzhou Cotton Market Brief, 3rd Week 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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