Tongzhou Cotton Market Brief, 3rd week of February 2025

I. Zhengmian (China's cotton futures contract)
(1) Positive factors
1) The central bank stated that it will maintain a moderately loose monetary policy.
2) Downstream industries are recovering, with weaving mills and textile enterprises gradually increasing their operating rates. Raw material inventories at yarn mills are not high, with cotton yarn inventories slightly increasing compared to the previous period. Raw material inventories at weaving mills are not high, slightly decreasing compared to the previous period. Cotton fabric inventories are at a high level for the same period, slightly decreasing compared to the previous period. Domestic yarn mills are currently profitable.
3) Basis is firm and at a high level for the same period; it slightly weakened last week.
(2) Negative factors
1) Trump announced the imposition of "reciprocal tariffs".
2) Looking ahead to next year's Xinjiang planting area, it is highly likely to still be an increase in production.
3) Hedging ratio exceeds half. The hedging ratio accelerated last week, increasing by 5 percentage points weekly. Hedging demand above around 13800 is relatively rigid.
II. US Cotton
(1) Positive factors
1) The National Cotton Council (NCC) announced on February 16 that the 2025 US intended cotton planting area is 9.56 million acres, a decrease of 14.5% year-on-year. A survey by the American Cotton Grower magazine shows that the 2025 US cotton planting area is expected to be 11.04 million acres, a decrease of 5.4% compared to the 11.7 million acres actually planted in 2024 by the USDA.
2) The fund has the largest-ever short position for this period, and there is limited room to further increase short positions. Last week, speculative longs increased by 3900 contracts, while shorts decreased by 4200 contracts, resulting in a net decrease of 8200 contracts.
3) The operating rate in Southeast Asia has slightly increased this week. Bilateral inventories are not high. There is still rigid demand for US cotton at low prices.
(2) Negative factors
1) US cotton exports have not been adjusted in place, and it is expected that there is still room for further downward adjustment, and US cotton is still under pressure.
2) The Brazilian Company for the Supply of Agricultural Products (CONAB)'s February 2024/25 crop production forecast: This year's total Brazilian cotton production is expected to be 3.762 million tons, an increase of 62,000 tons compared to last month and an increase of 2.4% compared to last year. The planting area continues to increase to 2.0369 million hectares this year, with a slight increase in yield to 123.1 kg/mu.
3) Long-term pressure from large supplies.
Focus: US-China relations, new US cotton planting

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Tongzhou Cotton Market Brief, 4th Week of February 2025

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Tongzhou Cotton Market Brief, Week 2 of February 2025

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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