Tongzhou Cotton Market Brief, 4th Week of February 2025

I. Zhengmian (China's Cotton Futures Contract)
(1) Positive Factors
1) On February 16, PBOC Governor Pan Gongsheng stated that the Chinese government will implement a more proactive fiscal policy and a moderately loose monetary policy.
2) Downstream recovery is slow, but weaving factories and textile companies are gradually increasing their operating rates. Raw material inventories at yarn mills are decreasing, while cotton yarn inventories have slightly increased month-on-month; weaving factories are seeing decreases in both. Yarn mills' immediate profits are stable.
3) Basis is firm. More than half of the upstream cotton has been priced, and the peak of hedging pressure has passed. As the proportion of upstream pricing increases, hedging pressure will gradually ease in the future.
(2) Negative Factors
1) Commercial inventories are slowly decreasing, but remain at historically high levels, indicating sufficient supply. As of February 15, national cotton commercial inventories totaled 5.6811 million tons, a decrease of 0.0656 million tons from the end of January.
2) Looking ahead to next year's Xinjiang planting area, there is a high probability of increased production.
3) There is significant hedging pressure above 14200.
II. US Cotton
(1) Positive Factors
1) The National Cotton Council of America (NCC) estimates that the intended US cotton planting area in 2025 will be 9.56 million acres, a year-on-year decrease of 14.5%. The US grain-cotton price ratio shows that cotton planting lacks a price advantage.
2) CFTC holding data shows that the net long position has rebounded last week. As of the week ending February 18, speculative longs increased by 3,488 contracts, shorts decreased by 2,009 contracts, and net shorts decreased by 5,497 contracts.
3) US cotton export signings and shipments have increased, and China has begun purchasing.
4) India's cotton peak season has passed, and CCI continues to stockpile. Southeast Asia's operating rates have slightly increased week-on-week.
(2) Negative Factors
1) As of February 16, Brazilian cotton planting is nearing completion. The 2024/25 cotton planting area has increased to 2.0369 million hectares.
2) Long-term pressure from large supplies.
3) The easing of the Russia-Ukraine conflict, the expectation of weaker crude oil prices, and the decline in chemical fiber costs are increasing competition and substitution demand for cotton.
Key Concerns: US-China relations, US cotton planting, US cotton exports, and domestic downstream demand

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Tongzhou Cotton Market Brief, Week 1 of March 2025

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Tongzhou Cotton Market Brief, 3rd week 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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