The long-staple cotton market is experiencing a rare stalemate of 'quoted but not traded.' Cotton enterprises are strongly inclined to support prices but dare not raise quotes, while downstream mills insist on hand-to-mouth buying, leading to a tug-of-war in price negotiations.
Price Stalemate Behind Supply-Demand Mismatch
From the latest quotes, the price system for long-staple cotton in Xinjiang warehouses shows clear stratification. Grade 336 long-staple cotton (breaking tenacity 38-40 cN/tex) from the 2024/25 crop in Bazhou is quoted at 26,720 yuan/ton on a fixed-price basis, with the seller bearing warehouse entry/exit fees and storage costs before title transfer. In Alar and Aksu, Grade 236/336 long-staple cotton (breaking tenacity 39-43 cN/tex) from the 2025/26 crop is quoted at 27,820-28,220 yuan/ton. Non-grade long-staple cotton (length 37mm, breaking tenacity 40 cN/tex) in southern Xinjiang warehouses is around 27,520 yuan/ton.
This price gradient reflects the market's pricing logic for quality differences: higher breaking tenacity and newer crop batches command a clear premium, while old-crop cotton is priced lower due to slow inventory clearance. However, overall quotes have not risen along with the Zhengzhou cotton futures rebound, indicating a lack of actual transaction support in the spot market.
Downstream Transmission: Weak High-Count Yarn Demand Is the Core Issue
The main downstream for long-staple cotton is high-count combed yarn, but since June, ex-factory prices for C50S and above high-count carded and combed yarn have seen notable declines. Against the backdrop of the traditional off-season for textiles, new orders are scarce, and cotton mills' capacity to absorb high-priced long-staple cotton is clearly insufficient.
This means that even if cotton enterprises have strong price support intentions, without downstream acceptance, any price increase would only further compress transaction volumes. Mills' current 'hand-to-mouth' strategy is essentially a defensive reaction to uncertainty in end-demand—they are unwilling to bear additional capital costs and price decline risks for inventory.
Supply Side: New Crop Reduction Expectations Support Price Logic
The reason cotton enterprises dare to support prices lies primarily in concerns over the 2026/27 new crop's yield and quality. High temperatures in Xinjiang during July-August may adversely affect cotton growth. Combined with the gradual depletion of low-priced 2023/24 and 2024/25 old-crop inventories, expectations of tighter future supply are heating up.
Moreover, some cotton enterprises believe the 'Golden September and Silver October' season may start earlier, around August, which would absorb existing inventory. This expectation provides psychological support for current price support behavior—they prefer to bear short-term inventory costs rather than sell at low prices.
Regional Price Divergence and Trader Strategies
From a warehouse perspective, quotes in Bazhou, Alar, and Aksu show significant differences, reflecting varying cotton quality and storage costs across producing regions. Bazhou, a traditional high-quality cotton area, has relatively lower quotes for Grade 336 long-staple cotton, possibly due to higher inventory pressure. In contrast, the 2025/26 new crop quotes in Alar and Aksu are higher, reflecting a premium for quality.
Traders commonly use a 'fixed price + negotiable storage fee' model, which retains price flexibility while leaving room for negotiation. However, the overall market lacks active buying, and traders are mostly waiting passively for downstream demand signals.
Short-Term Outlook: Narrow Fluctuations Remain the Theme
Combining supply and demand, the long-staple cotton market is unlikely to break the deadlock in the short term. The tug-of-war between cotton enterprises' price support and mills' cautious buying will keep prices fluctuating narrowly within the current range. After August, as new crop growth becomes clearer and 'Golden September and Silver October' demand kicks in, market direction will gradually emerge.