Henan cotton spinning enterprises face increasing operating pressure
From September 23rd to 27th, the China Cotton Textile Industry Association conducted field research in Zhengzhou, Kaifeng, Xuchang, Pingdingshan, Nanyang, Luoyang, and other places in Henan Province. The main purpose was to understand the production and operation of enterprises, raw material usage, and policy appeals. Cotton textile enterprises in Henan mainly produce pure cotton yarn products, which are highly similar to products from Xinjiang. Facing intense competition from low-cost yarn from Xinjiang, the production and operation of local enterprises are not optimistic. Most enterprises have been losing money since the second half of the year. Raw materials are purchased as needed, and product inventory is around one month. A few enterprises producing differentiated products are slightly better off than those producing pure cotton yarn, but the pressure has also increased significantly since the second half of the year.
Henan uses peak-valley electricity pricing for industrial electricity. The electricity price from 4 pm to 12 am (8 hours) exceeds 1.2 yuan/kWh. To control production costs, most enterprises choose off-peak operation, producing for 16 hours a day.
The enterprises visited are rather uncertain about the subsequent market situation and have temporarily slowed down their investment and product adjustment plans. Their current main goal is to maintain cash flow and keep the business running. To better control product inventory and further observe the post-holiday market situation, most enterprises have chosen to take a holiday during the National Day holiday and will choose appropriate countermeasures based on the cotton market situation in the new year after the holiday.
Entrepreneurs visited stated that in recent years, the development of China's cotton textile production capacity has deviated from market demand, leading to severe internal competition among domestic enterprises. Ineffective internal consumption has affected the overall competitiveness and profitability of the industry. To ensure the healthy and orderly development of the industry, enterprises call on relevant departments to focus on the stable and healthy development of the textile market, take into account the overall domestic situation, and create a fair market competitive environment for industry enterprises.
In addition, the shortage of import quotas affects the ability of enterprises to accept export orders and the development of high-end products. They hope that the import cotton quota policy can be appropriately relaxed to meet the cotton demand of enterprises. This survey visited many member enterprises of the Raw Material Industry Chain Branch of the China Cotton Textile Industry Association, actively listening to the opinions of enterprises on how to better play the role of the raw material industry chain branch, serve industry enterprises, help enterprises avoid operational risks, and strengthen the stickiness between upstream and downstream enterprises. In the future, the China Cotton Textile Industry Association will use the raw material industry chain branch as a platform to organize various forms of exchange activities to promote the coordinated development of upstream and downstream enterprises in the industry chain.
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
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Email：tongzhou@tongzhoucotton.com
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