On June 23, China's commodity market weakened across the board, with the cotton sector bearing the brunt. The main contract of Zhengzhou cotton futures fell during the session, breaking through the key psychological level of 16,000 yuan per ton—considered the industry's 'safety line'—and ultimately closing at 15,905 yuan per ton, down 105 yuan from the previous settlement price. Bearish sentiment quickly escalated on the board, with position structures showing a simultaneous influx of long-stop-loss orders and new short positions, making the short-term market direction clear.
Spot Market: A 'Wait-and-See' Stance Amid Weak Demand
The spot side did not see panic selling following the futures breakdown, but it equally lacked any active buying support. The domestic cotton 3128B price index stood at 17,631 yuan per ton, a marginal drop of just 1 yuan. While the fluctuation appears small on the surface, this price has been consolidating sideways for several days without substantial volume support. Downstream textile enterprises have seen order recovery fall well short of expectations, with finished product inventories piling up. Procurement strategies have fully shifted to 'on-demand, small batches, buy-as-needed,' and any thoughts of large-scale stockpiling have been extinguished by weak demand. This 'buy on rising, not on falling' mentality will only strengthen after the breakdown, making it difficult for the spot side to form effective price support in the short term.
External Transmission: US Cotton Decline 'Precisely' Impacts Port Quotes
Negative factors in the international market were released intensively, with the ICE US cotton main contract closing at 78.59 US cents per pound, a single-day decline of 1.03%. As US cotton planting approaches completion, market expectations for new-season production are generally being revised upward, with the persistent pressure of ample supply continuing. A stronger US dollar further weighed on dollar-denominated commodity valuations, compounded by systemic drag from simultaneous weakness in energy, grains, and financial sectors, leading to continuous capital outflows from the cotton market.
This external downturn quickly transmitted to domestic port quotes. On June 24, import cotton offers at main ports edged lower across the board. The international cotton price index for SM grade fell to 88.92 US cents per pound, translating to a 1% tariff delivery price of 14,961 yuan per ton; the M grade fell to 86.99 US cents per pound, translating to 14,627 yuan per ton. Notably, the decline in mid-grade M cotton was steeper than in high-grade SM cotton, and the domestic-import price spread narrowed simultaneously. However, this did not enhance the purchasing appeal of imported cotton—the downstream order-taking capacity determines that 'cheap' is not a sufficient reason to place orders.
Dual Weakness in Supply and Demand: Where is the Rebound Momentum?
The core logic chain currently suppressing cotton prices is clear and has shown no signs of reversal. On the supply side, expectations of ample new-season US cotton continue to ferment. On the macro front, the pattern of a stronger US dollar and overall pressure on commodities is unlikely to change in the short term. On the demand side, the recovery pace of domestic textile consumption is slow, with no significant improvement in end-user orders. Zhengzhou futures, spot, and port import cotton are all likely to continue fluctuating weakly, with insufficient market momentum for a rebound.
The industry needs to continuously track three key variables: weather changes in US cotton regions and their impact on new-season production expectations; whether domestic textile end-user orders can show marginal improvement after the traditional off-season; and the role of the RMB exchange rate in rebalancing import cotton costs. Only the emergence of new positive drivers on the supply-demand front can break the current persistent weakening trend.