Tongzhou Cotton Market Brief, Week 1 of December 2024

I. Zhengmian (China's cotton futures contract)
(1) Positive factors
1) The Politburo meeting and the Central Economic Work Conference will be held in mid-December to set the tone for next year's policies. The market currently anticipates relatively positive signals.
2) According to previous years, textile mills need to prepare inventory before the end of the year by the end of November. Therefore, yarn mills are still expecting orders from textile mills in December, and December's marginal month-on-month improvement compared to November.
3) The Zhengmian warehouse receipt is the third lowest in the past decade. The low number of warehouse receipts, coupled with tight inventories in mainland China, means structural contradictions still exist in the short term.
(2) Negative factors
1) If Trump takes office and suddenly announces a 60% tariff increase, it will severely impact China's clothing exports.
2) Xinjiang's production is expected to reach 6.5 million tons, exceeding market expectations. After the upward adjustment of Xinjiang's production, there is no supply and demand gap in the domestic market.
3) Downstream demand has weakened again marginally. The market has entered the traditional off-season in November. Yarn mills have slightly increased finished goods inventories, and textile mills are mainly focused on consuming existing inventories.
II. US Cotton
(1) Positive factors
1) Fund adjustments. As of November 19, the net long position of funds has dropped to its historical low of -13%. This extreme situation suggests a potential reversal, with funds having limited short positions remaining. The probability of the fund net long position rising later is high.
2) India CCI's procurement. Last week, India's CCI started large-scale procurement. Now, about half of the daily listed cotton is bought by the CCI. A total of approximately 1 million bales have been procured so far (currently 200,000 bales are listed daily). CCI's procurement has also led to rising cotton and yarn prices in India.
3) Farmers' price support. From the 03 contract's on-call data, we can see that a large number of farmers' unpriced cotton from the December contract have been moved to the 03 contract. This represents a large number of long positions shifted to the 03 contract, which is the reason for the rise in the 03 contract.
(2) Negative factors
1) Trump's potential future increase in tariffs on Chinese clothing may reduce demand for US cotton.
2) Brazil is highly likely to increase production next year, indicating that current prices haven't reduced planting area for next year.
3) The current demand for US cotton remains weak. Southeast Asia's operating rates have been slowly declining weekly, and feedback from Southeast Asia's inquiries in recent weeks shows a significant decline in demand after the price increase.
Focus: US-China relations

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Tongzhou Cotton Market Brief, 3rd week of December 2024

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Tongzhou Cotton Market Brief, Week 4, 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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