Import cotton prices at China's main ports saw a modest decline on July 9. The SM index closed at 90.92 cents/lb, down 0.61 cents from the previous day, while the M index settled at 88.99 cents/lb, down 0.60 cents. Under the 1% tariff, the port delivery prices dropped to 15,226 yuan/ton and 14,907 yuan/ton, respectively. Although this decline falls within a technical correction range, it introduces a new variable to the cotton price trend that has been range-bound for nearly two weeks.
Cost Transmission and Market Sentiment
This minor price dip is not an isolated event. From an industry chain perspective, upstream cotton price fluctuations propagate through the chain of "import cotton → spinning → grey fabric → finished fabric → garments," with a 1-2 week lag at each stage. Currently, the downstream yarn market is sluggish, with C32S carded yarn quotes hovering around 22,500-22,800 yuan/ton, and mills show little enthusiasm for restocking. This suggests that the modest price decline is unlikely to trigger large-scale purchases in the short term; instead, it may reinforce a "wait for lower prices" mentality among buyers.
On the international front, ICE cotton futures are consolidating in the 72-74 cents/lb range, reflecting a tug-of-war between macroeconomic bulls and bears. The upcoming USDA monthly supply-demand report is a key focal point; if it raises global ending stock estimates, cotton prices could face further downward pressure. For Chinese import cotton buyers, exchange rates remain another critical variable—the yuan-dollar midpoint around 7.25 directly impacts actual import costs.
Ripple Effects Across Regional Industrial Clusters
The impact of import cotton price changes varies across domestic industrial clusters. Spinning mills in Shandong and Jiangsu, where imported cotton typically accounts for 30%-50% of raw materials, are more sensitive to international price movements. Large enterprises like Shandong Weiqiao and Jiangsu Yueda usually adjust their blending ratios based on the domestic-international cotton price spread. Currently, the spread remains at 1,500-1,800 yuan/ton, still favoring imported cotton, but the recent decline is insufficient to trigger widespread point-price transactions.
Xinjiang's cotton region presents a different picture. As China's main cotton producing area, spot prices for Xinjiang cotton (Grade 3128B) remain stable at 15,800-16,000 yuan/ton, narrowing the gap with imported cotton. For Henan and Hubei mills focused on pure cotton yarn, the cost-effectiveness of domestic cotton is improving, which may prompt some to temporarily reduce imported cotton usage in favor of Xinjiang cotton.