Tongzhou Cotton Market Brief, Week 2 of November 2024
I. Zhengzhou Cotton
(1) Positive Factors
1 Although there are risks after Trump's ascension, domestic policies will likely focus on expanding domestic demand to offset these risks, and future domestic policies will continue to provide stimulus.
2 Currently, the downstream inventory structure is healthy, with yarn mills having low raw material and finished product inventories. Yarn mills are currently profitable, and trader inventories are only at 50%.
3 From an absolute price perspective, cotton 14000 prices near this level are considered undervalued. If the valuation falls further, spot market companies and traders will directly purchase goods on the market.
(2) Negative Factors
1 With Trump's inauguration, if he suddenly announces additional 60% tariffs, it will severely impact Chinese clothing exports.
2 Due to the relatively low absolute valuation, the hedging ratio of downstream companies is not high, which means that hedging pressure has not been fully released, and there will be a large hedging demand after the market rises.
3 Marginal downstream demand has weakened again, and the market has entered 11 the traditional off-season, with yarn mill finished goods inventories slightly increasing, and fabric mills mainly focusing on digesting existing inventories.
II. US Cotton
(1) Positive Factors
1 When the US cotton balance sheet shows the highest supply and the highest inventory-to-sales ratio, the price reached 67 cents. In recent months, production has been continuously revised downwards, and the inventory-to-sales ratio has been continuously adjusted downwards. The period of greatest fundamental pressure has ended, and prices have gradually recovered from their lows.
2 Judging from recent domestic and international demand and orders, the overseas market is better than the domestic market, so 70 Southeast Asian buyers are actively purchasing below
3 cents.
(2) Negative Factors
1 In the short term, cotton farmers' price support still provides some support to the market.
2 Trump's ascension may lead to increased tariffs on Chinese clothing, and demand for US cotton is expected to decrease. 11 Market supply is concentrated in 11 month, which is the period of greatest supply pressure.
3 From the attitude of cotton farmers, it can be seen that cotton farmers have recently become more flexible and have begun to gradually sell at quoted prices.
Focus: US-China Relations
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.
Contact
Henan Tongzhou Cotton Industry Co., Ltd.
Address: 10th Floor, Henan Nongxin Building, No. 19 Commercial Outer Ring Road, Zhengdong New District,Zhengzhou, China
Tel：86037165836206
Email：tongzhou@tongzhoucotton.com
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