On July 9, import cotton prices at Chinese main ports experienced a slight decline. The international cotton price index (SM) fell to 90.92 cents per pound, down 0.61 cents from the previous trading day. Converted at a 1% tariff rate, the general trade port delivery price was approximately 15,226 yuan per ton. The international cotton price index (M) also dropped to 88.99 cents per pound, corresponding to a delivery price of 14,907 yuan per ton. Although the magnitude of the change is limited, it sends a clear signal in the current sensitive period for textile raw materials: import cotton costs are moving downward.
Futures Market Weakens in Tandem
The decline in import cotton prices is not an isolated event. On the same trading day, the main contract of cotton futures on the Zhengzhou Commodity Exchange (ZC2609) closed at 15,930 yuan per ton, down 245 yuan from the previous day, with open interest decreasing by 34,680 lots. The simultaneous decline in both price and open interest indicates that long positions are actively exiting, and market expectations for short-term cotton prices have turned cautious. This linked weakness between spot and futures markets means that the drop in import cotton costs is exerting substantial pressure on domestic cotton pricing through sentiment transmission and arbitrage mechanisms.
Clear Cost Transmission Path
From an industrial chain perspective, the weakening import cotton prices directly impact the domestic cotton spot market. As a substitute, lower import prices put domestic lint cotton at a competitive disadvantage, pressuring its price. Public industry data shows that the price gap between imported and domestic cotton has narrowed, weakening the bargaining power of domestic cotton farmers and processors. More critically, as the raw material source for the cotton textile chain, price fluctuations at the cotton level transmit stepwise through the sequence: cotton → lint → cotton yarn. Currently, the loosening of upstream cost support has begun to spread to the lint segment. While the cotton yarn segment has been less affected so far (bull/bear score: -0.5), sustained weakness in raw material prices will gradually increase downward pressure on yarn prices.
Actual Impact on Industrial Clusters
For textile industrial clusters that rely heavily on imported cotton—such as those in Shandong, Jiangsu, and Henan provinces—the price drop means lower short-term procurement costs, helping to alleviate some raw material cost pressures. However, the flip side is that product pricing space is compressed. If downstream garment orders do not adjust prices accordingly, cotton spinning enterprises face margin pressure from both upstream and downstream. Additionally, the reduction in open interest suggests that market participants are adopting a wait-and-see attitude toward future demand, and companies' restocking willingness may become more conservative.
Key Variables for Future Trends
The current weakness in the cotton market essentially reflects a rebalancing of supply and demand. On one hand, global cotton production expectations are rising, while consumption recovery is uneven, leaving international cotton prices with little upward momentum. On the other hand, the domestic textile industry is in a traditional off-season, with downstream demand showing no clear signs of recovery. Therefore, short-term fluctuations in import cotton prices are likely to remain within a narrow range. A true turning point will depend on whether the peak ordering season at the end of the third quarter materializes as expected, and on supply gap expectations before the new cotton crop arrives.