Since July, the traditional off-season effect in the textile industry has persisted, with sales of 60S and above high-count yarns remaining weak and mill quotes declining. However, the Xinjiang long-staple cotton market presents a starkly different picture: spot prices have stayed firm, and some cotton enterprises have even narrowed discounts for regular customers and large orders. This divergence in pricing and sentiment between upstream and downstream is pushing the market into a rare stalemate.
Upstream Hoarding: The 'Bulk-Only' Mentality and Price Floor
From the Korla warehouses in southern Xinjiang to the Aksu supervised warehouses, long-staple cotton quotes remained stable in early July. Data shows that on July 8-9, the fixed price for the 2024/25 crop with a breaking strength of 39-41 CN/TEX stood at 26,720-26,920 yuan/ton (including one-month trucking fees), while the 2025/26 crop with higher breaking strength (40-42 CN/TEX) was quoted at 28,220 yuan/ton. Compared with late June, these prices have barely changed.
More telling is the sales strategy of cotton enterprises. A major cotton trader revealed that it has only 11 batches of machine-picked long-staple cotton left in its Aksu warehouse but is in no hurry to sell, preferring instead to have large-scale textile mills take delivery in bulk. It shows little interest in small-lot purchases. This hoarding sentiment reflects expectations of higher future prices—mills are willing to bear inventory costs rather than sell at current levels.
Downstream Pressure: Spinners' 'Light Inventory' and Half-Lot Deliveries
In contrast to upstream firmness, downstream spinners are grappling with weak demand for high-count yarns. Mills in Shandong, Jiangsu, and Henan report that long-staple cotton inventories in inland warehouses are limited, concentrated in Zibo, Weifang, and Jiangyin. Faced with mills' 'bulk-only' demands, spinners are adopting a just-in-time purchasing strategy to maintain 'light inventory' operations.
To accommodate this, traders now allow half-lot deliveries—contracts are still signed for one or several batches, but payments are made only for the actual quantity taken each time. While this compromise eases spinners' cash flow pressures, it also reflects the market's tepid trading activity. The long-staple cotton market has thus entered a 'lukewarm' state: prices neither rise nor fall, and transactions remain lackluster.
External Variable: USDA Data Fails to Shift Domestic Dynamics
The USDA's latest projection shows that US Pima cotton planted area for 2026/27 is 150,000 acres, up 6% year-on-year. This data initially raised expectations of increased import supply, but it has not materially impacted domestic spot prices. On one hand, Pima and Xinjiang long-staple cotton differ in quality and application; on the other, domestic spinners remain heavily reliant on Xinjiang cotton, especially in the high-count yarn segment.
This means the core contradiction lies in domestic supply-demand mismatch: mills hoard due to inventory costs and bullish outlook, while spinners buy cautiously due to weak orders and cash constraints. This standoff is unlikely to break soon, and prices will likely remain rangebound.