Price trend:
With cotton harvesting nearing its end and new cotton entering the market in concentrated quantities, supply pressure was gradually emerging. The mutual reduction of tariffs between China and the US is expected to benefit the export environment later on. According to the SunSirs commodity market analysis system, as of November 10th, the spot price of grade 3128B cotton was 14,849 RMB/ton, a weekly decrease of 0.07%. This cycle, the average settlement price of the Zhengzhou cotton futures main contract was 13,569 RMB/ton, a decrease of 29 RMB/ton from the previous week, a drop of 0.2%.
Analysis review
On the macro level: China and the United States mutually reduced tariffs, and it was clarified that from November 10, 2025, the additional tariff on imported US cotton will be reduced to 10%, and the cumulative additional tariff rate on textile and apparel exports to the United States will be reduced to about 27.5%-45%. Under the favorable policies, the foreign trade export environment was further improved.
Regarding costs: The overall cotton harvest in Xinjiang was nearing completion. Recently, the purchase price of machine-picked cotton in southern Xinjiang had been concentrated at 6.30-6.40 RMB/kg, while in northern Xinjiang it was concentrated at 6.15-6.30 RMB/kg. The cost of new cotton basically solidified at around 14,600-15,000 RMB/ton, which provided solid support for Zhengzhou cotton futures prices. When cotton prices fall close to this range, resistance will be significantly strengthened.
On the supply side: With the concentrated market entry of new cotton, the increased supply led to a rise in commercial inventory, gradually revealing supply pressure. According to data from the National Cotton Market Monitoring System, as of November 6, 2025, the national new cotton harvest progress was 95.3%, an increase of 1.3 percentage points year-on-year; the national new cotton processing rate was 48.0%, an increase of 2.4 percentage points year-on-year; and the sales rate was 18.3%, an increase of 12.2 percentage points year-on-year. National commercial inventory was showing an upward trend. As of November 7, 2025, the total commercial cotton inventory was 2.8478 million tons, an increase of 521,700 tons compared to the previous week, representing a growth rate of 22.43%.
Internationally: The mutual tariff reductions between the US and China stabilized market expectations. However, under pressure from the continued US government shutdown leading to missing USDA reports, ICAC's expectation of a looser global supply and demand balance this year, and concerns about global demand, international cotton prices briefly rose at the beginning of the week before falling back. Last week, the average settlement price of the most active New York cotton futures contract was 64.85 cents per pound, down 0.41 cents per pound from the previous week, a decrease of 0.6%..
According to the November global supply and demand forecast released by the International Cotton Advisory Committee (ICAC), global cotton production in 2025/26 is expected to be 25.4 million tons, a decrease of 39,000 tons from the previous month, and basically the same as the 25.39 million tons of the previous year. Consumption is expected to be 25 million tons, with production exceeding consumption by 400,000 tons.
On the demand side: The off-season atmosphere in the cotton yarn market intensified, with overall demand remaining weak. Inland textile companies reported fewer new orders. As of November 6, the operating rate of textile companies in major regions was 65.4%, a decrease of 0.3% from the previous week, indicating the off-season was in full swing. Inland textile companies had seen a significant decrease in new orders, and some have reduced their operating rates. Operating rates in Xinjiang remained stable, with inland companies operating at 50-60% capacity, while Xinjiang's operating rate remained around 90%.
According to the latest statistics from the General Administration of Customs, textile and apparel exports in October totaled $22.26 billion, a year-on-year decrease of 12.6%. Specifically, textile exports reached $11.26 billion, down 9.0%, while apparel exports totaled $11 billion, down 16.0%. From January to October, cumulative textile and apparel exports reached $243.94 billion, a year-on-year decrease of 1.6%. Driven by positive news from the China-US trade negotiations in the latter two months of the fourth quarter, China's exports to the US are expected to recover slightly, with overall export expectations for the year remaining stable.
Market Forecast:
In summary, while macroeconomic factors such as the mutual tariff reductions between China and the US improved market sentiment, they were unable to quickly reverse the supply pressure and weak actual demand resulting from the concentrated arrival of new cotton. Cotton prices are seeking a balance between the support of solidified new cotton costs and supply pressure. However, the domestic downstream market is gradually entering the off-season, resulting in limited order growth. Exports have improved slightly after the tariff reduction, but overall performance remains weak. It is expected that cotton prices will fluctuate between bullish and bearish forces in the short term, with attention focused on demand-side conditions in the later stages.
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