3128B Cotton Average Price Drops Below 17800 Yuan, Narrowing Regional Spread Signals Market Shift

On the first trading day after the holiday, the spot quotation range for domestic 3128B grade lint cotton narrowed to 17,626-17,871 yuan per ton, with a national arithmetic average of approximately 17,750 yuan per ton. This price level has fallen by about 300 yuan per ton since early June, and the spread between major producing regions is rapidly compressing.

Price Distribution: Xinjiang Discount Narrows, Inland Markets Converge Based on public quotations on July 1, Xinjiang market became the lowest price zone nationwide at 17,626 yuan per ton, while Anhui market led at 17,871 yuan per ton. Notably, the price gap between Xinjiang and traditional consumption areas such as Shandong and Jiangsu has shrunk from 400-500 yuan per ton at the beginning of the year to less than 250 yuan per ton. This suggests that the logistics cost advantage of Xinjiang cotton is being repriced—either due to reduced transportation costs out of Xinjiang or weakened demand for Xinjiang cotton amid ample inland inventories.

Prices in six provinces—Hebei, Henan, Shandong, Jiangsu, Zhejiang, and Fujian—clustered within a narrow range of 17,733-17,783 yuan per ton, with a fluctuation of only 50 yuan per ton. This highly convergent price distribution indicates that the cotton market has entered a weak equilibrium: downstream mills are purchasing on demand, traders have low stockpiling willingness, and regional arbitrage opportunities have nearly disappeared.

Industry Impact: Cost Pressure Eases, Yarn Profit Recovery Window Opens The decline in lint cotton prices from elevated levels is a direct positive for downstream spinning mills. Taking 32-count pure cotton yarn as an example, at current cotton prices, spinning margins have recovered from losses in May to near the breakeven line. If cotton prices continue to hold below 17,700 yuan per ton, the yarn segment is expected to achieve positive profits in the third quarter.

However, for upstream ginners and growers, the Xinjiang quotation of 17,626 yuan per ton is approaching the cost of production in some areas. Given that the target price subsidy policy for Xinjiang cotton in 2026 has not yet been clarified, this price level may affect planting intentions for the new season.

Another signal worth noting: the price spread between Anhui (17,871 yuan per ton) and Jiangxi (17,733 yuan per ton) reached 138 yuan per ton, historically high. Anhui's position as a price highland in a non-traditional producing region may reflect a temporary shortage of high-grade cotton locally or logistics delivery issues.

Practical Recommendations ### For Buyers - With the national spread narrowing, prioritize direct procurement from Xinjiang to capitalize on reduced logistics costs and lock in lower prices. - Suspend bulk purchases in the Anhui market until the price spread returns to normal levels. - Monitor order rhythms during the July-August off-season; if downstream grey fabric inventories accumulate, cotton prices may further test support at 17,500 yuan per ton.

For Spinning Mills - Take advantage of current low cotton prices to increase regular inventory by 3-4 weeks, locking in cotton costs for third-quarter production. - Pay attention to the cost-effectiveness switch between Xinjiang and inland cotton: if the Xinjiang discount continues to narrow, increase the proportion of inland cotton in the blend to reduce logistics risk. - Adjust yarn quotations promptly in line with cotton price changes to avoid order losses from lagging cost pass-through.