Tongzhou Cotton Market Brief, Week 5, December 2024

I. Zhengmian (China's cotton futures contract)
(a) Bullish Factors
1) The market has overreacted to the Trump risk. Currently, downstream sectors are making rigid preparations and purchases, and traders are lowering their risk appetite and reducing inventories. There may be inventory replenishment after Trump takes office and implements policies.
2) Currently, cotton valuations are low. The absolute price is low, and it is also low relative to polyester staple fiber and viscose.
3) In the short term, it's very risky to make deals now because of macroeconomic expectations and ample liquidity.
(b) Bearish Factors
1) Domestic macroeconomic policies have been implemented for now, and there are no incremental policy expectations before the new year; domestic macroeconomic conditions cannot further boost the market.
2) With the decline in futures prices, downstream sectors have continuously postponed replenishment expectations. Yarn mills' finished goods inventories have again reached high levels; before the new year, inventory replenishment is currently expected to be weak and unable to boost the market.
3) The per unit yield of cotton in southern Xinjiang shows an increasing trend. Compared with other agricultural products, cotton has relatively guaranteed returns, and next year's cotton production is still expected to increase in acreage and output.
(a) Bullish Factors
II. US Cotton
1) China is about to enter the new year's quota allocation period.
2) Funds have the largest short positions in history for the same period. There is little room for further increases in short positions.
3) According to the latest signings, transactions in the Southeast Asian market are active at prices below 69 cents per pound.
(b) Bearish Factors
1) After Trump takes office, he may increase tariffs on Chinese clothing, and demand for US cotton is expected to decrease.
2) Brazil is highly likely to increase production next year, indicating that the current price has not reduced next year's planting area.
3) Currently, the demand for US cotton is still weak, and the operating rate in Southeast Asia is slowly declining weekly.
 

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Tongzhou Cotton Market Brief, Week 1 of January 2025

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Tongzhou Cotton Market Brief, Week 4 of December 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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