During the traditional off-season in the textile industry, the long-staple cotton market is experiencing a rare supply-demand tug-of-war. On one side, cotton enterprises are holding firm on prices and narrowing discounts; on the other, mills are purchasing only for immediate needs and maintaining minimal inventories. Both sides are entrenched, leaving trading volumes in a tepid state.
The Cost Logic Behind Firm Spot Prices
According to publicly available industry data, on July 8-9, a fixed price for 2024/25 grade 236/335/336 long-staple cotton in Bazhou warehouses in southern Xinjiang was reported at 26,720-26,920 yuan per ton (including one month of truck delivery fees). In Aksu warehouses, the fixed price for 2025/26 grade 336 long-staple cotton with a breaking tenacity of 40-42 CN/TEX reached 28,220 yuan per ton, including warehousing and storage fees before title transfer. Compared with late June, these prices have barely changed, reflecting cotton enterprises' reluctance to sell.
A major cotton trader's inventory structure reveals the root of this mentality: it has only 11 batches of 2025/26 machine-picked long-staple cotton in an Aksu supervised warehouse, with a breaking tenacity of 39-41 CN/TEX. Facing such limited high-quality supply, the company explicitly stated it is not in a hurry to sell and is even uninterested in small-lot purchases of one or two batches, preferring that large-scale mills buy in bulk. This desire for concentrated sales is essentially a defense of pricing power in a low-inventory environment.
Weak Downstream Demand and Mills' Defensive Operations
In stark contrast to upstream firmness, the downstream high-count yarn market is sluggish. During the industry's off-season, production and sales of 60S and above high-count yarn have been persistently weak, with mills' quotations falling. Several large-scale mills in Shandong, Jiangsu, and Henan reported that current inventories of 2024/25 and 2025/26 long-staple cotton in inland warehouses are already low, concentrated in traditional cotton-spinning hubs like Zibo, Weifang, and Jiangyin.
Mills are universally adopting a "lean inventory" approach—only replenishing for immediate production needs and extremely cautious about bulk purchases. To accommodate this buying rhythm, traders have even been forced to accept half-batch pickups, where contracts are signed for one or several batches but payment is made per actual pickup quantity. While this model superficially facilitates transactions, it fails to activate market liquidity, leaving long-staple cotton trading in a "tepid water" state.
International Supply Variables vs. Domestic Expectations
On the supply side, the USDA's 2026/27 Crop Planting Intentions Report forecasts US Pima cotton planted area at 150,000 acres, a 6% year-on-year increase. This figure is significantly higher than the 130,000 acres forecast in March (which predicted an 8.1% decrease), suggesting potential oversupply in US long-staple cotton.
However, this international variable has yet to transmit to the domestic market. On one hand, imported Pima cotton differs from Xinjiang long-staple cotton in quality and usage habits, requiring time for downstream enterprises to switch raw materials. On the other hand, current domestic long-staple cotton inventories are already low, making it difficult for cotton enterprises' pricing power to weaken in the short term. This mismatch between expectations and reality is the core reason for the buyer-seller standoff.
When Will the Stalemate Break? Key Indicators to Watch
From an industrial chain transmission perspective, long-staple cotton prices will only loosen if one of two conditions is met: first, a substantial recovery in downstream high-count yarn orders, prompting mills to increase replenishment; second, a large influx of imported Pima cotton, creating substitution pressure on domestic supply. Currently, the off-season is not over, and high-count yarn demand is unlikely to improve in the short term; meanwhile, the arrival pace and price competitiveness of imported cotton remain uncertain.
This suggests the long-staple cotton market may enter a phase of equilibrium characterized by "high prices, low volumes." For cotton enterprises, maintaining firm prices means rising inventory carrying costs; for mills, maintaining lean inventory risks having high-quality supply snapped up by competitors.