Tongzhou Cotton Market Brief, Week 4, November 2024

I. Zhengmian (China Cotton Futures Contract)
(A) Positive Factors
1) Although there are risks after Trump's ascension to power, domestic expansionary policies will likely counteract this, and future domestic policies will continue to provide stimulus.
2) Currently, the downstream inventory structure is healthy, with both yarn mills' raw material and finished product inventories being relatively low. Moreover, yarn mills are currently profitable, and trader warehouse inventories are only about 50%.
3) Zhengmian warehouse receipts are at their third lowest level in the past ten years. The low number of warehouse receipts, coupled with tight inventories in mainland China, means structural contradictions still exist in the short term.
(B) Negative Factors
1) Trump's ascension to power; if he suddenly announces a 60% tariff increase in the future, it would severely impact Chinese garment exports.
2) Xinjiang's production is expected to reach 6.5 million tons, exceeding market expectations. After the upward revision of Xinjiang's production, the domestic situation shows no supply-demand gap.
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 textile mills focusing on digesting existing inventories.
II. US Cotton
(A) Positive Factors
1) When the US cotton balance sheet showed the highest supply and the largest stock-to-sales ratio, the price reached 67 cents. In recent months, production has been continuously revised downward, and the stock-to-sales ratio has continuously decreased. The period of greatest pressure on the fundamentals is over, and prices have gradually recovered from their lows.
2) Due to low prices, cotton farmers are unwilling to sell at low prices. Currently, the amount of cotton held in CCC (Commodity Credit Corporation) inventories by farmers is second only to the 19/20 fiscal year, resulting in relatively low short-term spot market availability.
3) From the basis perspective, the Brazilian basis has recently risen by 100 points, while the US cotton basis remains weak. From the basis perspective, rigid demand still exists.
(B) Negative Factors
1) Trump's ascension to power may lead to increased tariffs on Chinese garments in the future, and US cotton demand is expected to decrease.
2) From the supply side, India's daily cotton arrivals are at their fastest pace in nearly three years. Xinjiang's production has also exceeded expectations, and US cotton arrivals are as scheduled. Globally, the supply side is currently under significant pressure.
3) Feedback from Southeast Asian spinning mills suggests that demand remains weak for the time being.
Focus: US-China relations
 

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Tongzhou Cotton Market Brief, Week 1 of December 2024

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Tongzhou Cotton Market Brief, 3rd Week 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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