Tongzhou Cotton Market Brief, 3rd Week of November 2024

I. Zhengmian (China's cotton)
(I) Positive Factors
1) Although there are risks after Trump's ascendance, domestic policies will likely focus on expanding domestic demand to offset these risks. Future domestic policies will continue to provide stimulus.
2) Currently, the downstream inventory structure is healthy, with yarn mills' raw material and finished product inventories both relatively low. Yarn mills are currently profitable, and trader's public warehouse inventories are only at 50%.
3) From an absolute price perspective, the price of cotton around 14000 is considered low to moderately undervalued. If the valuation becomes even lower, spot market companies and traders will directly purchase goods on the market.
(II) Negative Factors
1) With Trump's ascendance, a sudden announcement of a 60% tariff increase could severely impact Chinese clothing exports.
2) Xinjiang's domestic cotton production is expected to reach 6.5 million tons, exceeding market expectations. The market has not yet priced in the pressure of this excess supply.
3) Marginal downstream demand has weakened again. The market has entered the traditional off-season in November, with yarn mill finished goods inventories accumulating slightly, and fabric mills primarily focusing on digesting existing inventories.
II. American Cotton
(I) Positive Factors
1) When the US cotton balance sheet showed the highest supply and the highest stock-to-sales ratio, the price dropped to 67 cents. In recent months, production has been continuously revised downward, and the stock-to-sales ratio has been continuously adjusted lower. The period of greatest fundamental pressure has ended, and prices have gradually recovered from their low point.
2) Judging from recent domestic and international demand and orders, the overseas market is better than the domestic market; therefore, Southeast Asian purchasing is active below 70 cents.
3) In the short term, cotton farmers' price support still provides some support to the market.
(II) Negative Factors
1) Trump's future potential increase in tariffs on Chinese clothing is expected to reduce demand for American cotton.
2) Market supply is concentrated in November, which will be the period of greatest supply pressure.
3) As the December FND approaches, upstream and downstream participants need to set prices or roll over contracts. December contract purchases far exceed sales, which will exert strong selling pressure on the market in the short term.
Points to Watch: Sino-US Relations

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Tongzhou Cotton Market Brief, Week 4, November 2024

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Tongzhou Cotton Market Brief, Week 2 of November 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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