SunSirs: Boosted by Favorable Factors, Cotton Prices Rose Nearly 4% in June

Price trend

Since June, domestic commercial inventories have continued to decrease, the supply side is tight and the downstream has the support of rigid replenishment demand, and cotton prices have risen slightly under the stimulus of macro favorites. According to the commodity market analysis system of SunSirs, as of June 30, the spot price of 3128B grade cotton lint was 15,160 RMB/ton, up 3.97% in the month.

In terms of futures, domestic and foreign cotton futures rose, and the international cotton price rose more than that in China. As of the 30th, the settlement price of the main contract of Zheng cotton was 13,815 RMB/ton, up 4.1% month-on-month, and as of the 29th, the main contract of ICE cotton futures was 69.32 cents/pound, up 6.5% month-on-month.

Market review: in early June, under the off-season atmosphere of the industry, domestic cotton prices fluctuated slightly, and in the middle of the month, the first meeting of the Sino-US economic and trade consultation mechanism was held to boost market confidence, and domestic cotton prices fluctuated strongly with market sentiment, but the off-season of domestic and foreign cotton textile consumption had a limited role in supporting upstream demand. In late June, the macro environment at home and abroad was improving, international cotton prices rose, and the internal and external linkage market was volatile to be stronger.

Domestic:

Supply side: The domestic cotton supply side tightened, and the data showed that the national commercial inventory continued to decline, but the decline gradually narrowed. As of June 27, 2025, the total commercial inventory of cotton was 2.8799 million tons. From January to May 2025, a total of 440,000 tons of cotton were imported, a year-on-year decrease of 1.21 million tons, a decrease of 73.5%. In 2024/25, China's cumulative cotton imports was 920,000 tons, the lowest level in the past seven years. Combined with the continuous decline in commercial inventory, the pressure on the cotton supply side had eased compared to the previous period.

According to the China Cotton Association, the national cotton planting area reached 44.823 million mu this year, and it is currently growing well. The cotton planting area in Xinjiang reached 40.9 million mu, a year-on-year increase of 3.3%. In terms of the growth of new cotton, at present, with the continuous rise in temperature in Xinjiang, the growth progress of cotton has accelerated, and it has generally entered the early flowering stage. Part of the cotton fields have shown signs of pest infestations, which have disrupted the expected yield of new cotton, and some cotton companies are adopting a wait-and-see attitude towards their products.

Demand side: The domestic cotton yarn market continued to be light, the operating rate was slowly decreasing, and the market just replenished stocks on demand. The lack of terminal demand led to the gradual increase in the accumulation rate of cotton yarn, and the recent sharp rise in domestic cotton and polyester staple fiber prices exacerbated the operating difficulties of yarn mills, and the spot yarn cotton price spread decreased to the lowest level since this year. According to monitoring, as of June 27, the start-up load of textile enterprises in mainstream areas was 71.2%, down 0.70% from the previous month.

International:

The macro situation in the international market was warming, the dollar was falling, and the external market was rising as a whole. In addition, the recent growth progress of U.S. cotton was slow, the excellent rate was low, the weather disturbance was enhanced, and many factors inside and outside the industry boosted cotton prices to continue to rebound. According to the USDA's weekly crop growth report, the U.S. cotton quality rate was 47% in the week ending June 22, 2025, compared to 48% in the previous week and 56% in the same period last year. The U.S. Department of Agriculture is about to release a report on the actual sown area of cotton, and the market is highly concerned about the adjustment of U.S. cotton supply expectations.

Market outlook

Short-term cotton tightness and weather changes to bring support may last for a period of time, but the spot price continues to increase the upward pressure, follow-up orders are limited, the current replenishment willingness is weak, in the context of the gradual increase in the cotton yarn accumulation rate, the space that continue to rise may be relatively limited, cotton prices are expected to fluctuate in July.

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