SunSirs: Consumption Encounters Off-season, Cotton Imports Significantly Reduced

Last week, domestic and foreign cotton prices diverged slightly, domestic cotton prices fluctuated strongly, and ICE cotton futures fluctuated and weakened. According to the commodity market analysis system of SunSirs, as of June 23, the spot price of 3128B grade lint was 14,882 RMB/ton, up 0.48% week-on-week.

In terms of futures, as of the 20th, the settlement price of the main contract of Zheng cotton was 13,505 RMB/ton, up 40 RMB/ton from the previous week, and the main contract of ICE cotton futures was 66.7 cents/pound, down 1.14 cents/pound from the previous week.

Domestically: Domestic cotton industry inventories continued to decline, cotton imports in May decreased significantly, and tight supply was expected to support the bottom of cotton prices, but the demand side was difficult to change the off-season characteristics to form a certain suppression on the market, and the short-term may still maintain a range of fluctuations. From January to May 2025, the cumulative cotton imports were 440,000 tons, a year-on-year decrease of 1.21 million tons, a decrease of 73.5%. In 2024/25, my country's cumulative cotton imports reached 920,000 tons, the lowest level in nearly seven years. Combined with the continuous decline in commercial inventories, the pressure on the cotton supply side has eased compared with the previous period.

On the demand side: the domestic cotton yarn market continued to be sluggish, the operating rate was slowly reduced, and the market was mainly based on rigid demand replenishment. As of June 20, the operating load of textile enterprises in mainstream regions was 71.7%, a decrease of 0.5% month-on-month. There is no sign of improvement in new orders. There are currently few orders for summer clothing replenishment, and autumn and winter clothing have not yet started. The atmosphere of the downstream off-season has deepened, and the price-cutting sentiment has continued to increase. The profits of textile enterprises have been under pressure, and the loss margin has increased.

International: The recent increase in rainfall in the US cotton-producing areas has improved soil moisture conditions. As of June 17, the drought rate in the US cotton-producing areas has dropped to 3%, lower than 9% in the same period last year, which is conducive to cotton growth. Last week, the contract volume of US cotton next year rebounded significantly, but the pessimistic market atmosphere suppressed the rebound in cotton prices. From June 6 to 12, 2025, the net export contract volume of upland cotton in the United States for 2024/25 was 18,900 tons, an increase of 38% from the previous week and a decrease of 23% from the average of the previous four weeks; the shipping volume was 46,400 tons, a decrease of 13% from the previous week and a decrease of 24% from the average of the previous four weeks.

Market forecast: At present, the off-season of the textile industry is becoming more and more obvious, domestic cotton stocks are being digested continuously, the cotton market has slowed down, and the profit margin of textile enterprises has further narrowed. In the short term, cotton prices may still maintain a range of fluctuations, and attention should be paid to the impact of persistent high temperatures in Xinjiang on cotton growth.

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