High-count yarn prices have been weakening, yet upstream long-staple cotton prices remain unchanged. By late July, inventories of Xinjiang long-staple cotton in major inland consuming regions—Henan, Shandong, Jiangsu, and Hubei—have dropped to multi-year lows, with listings of older crops from 2023/24 and 2024/25 significantly reduced. This supply-demand mismatch is setting the stage for a potential shortage in August-September.
Dual Support from Costs and Expectations
On July 20-21, the fixed price for 2024/25 crop long-staple cotton (no grade, breaking tenacity 39-41 cN/tex) in southern Xinjiang warehouses stood at 26,720-26,920 yuan/ton (including one-month truck delivery and pre-transfer storage fees). The 2025/26 crop, grade 336 with breaking tenacity 40-42 cN/tex, was quoted at 28,220 yuan/ton—unchanged from early July quotes. Mills are offering only minimal room for negotiation on firm orders, signaling strong price-holding resolve.
This price resilience is underpinned by three factors: continued destocking of domestic long-staple cotton, especially in inland warehouses; rising quotes for US Pima cotton (both bonded and afloat), raising the cost of import substitution; and anticipation of traditional peak-season orders in September-October, with some mills expecting restocking demand to emerge in mid-to-late August.
Structural Imbalance in Inventory Distribution
Currently, the bulk of 2025/26 crop long-staple cotton is stored in southern Xinjiang supervised warehouses in Aksu, Aral, Tiemenguan, and Korla. Traders and ginners show low enthusiasm for moving stocks to inland consumption zones. This leaves inland warehouses scarce, while Xinjiang local stocks remain relatively ample. For inland spinners, purchasing long-staple cotton now involves not only a higher spot premium but also added transportation costs and lead time from Xinjiang.
One ginning company in Awati revealed it still has about 700 tons of 2025/26 crop long-staple cotton for sale, mainly grades 336/337 or no grade. The company explicitly stated that, given continued destocking of domestic long-staple cotton, rising imported Pima prices, and possible early placement of peak-season orders, it has no plan to cut prices in the near term.
Why Weak High-Count Yarn Hasn't Passed Through to Raw Materials
Over the past week or so, ex-factory prices of 60S and above high-count carded and combed yarn from large-scale mills have shown sustained weakness, and Zhengzhou cotton futures have been volatile. Conventional logic would suggest that weakening downstream demand should push raw material prices lower. But the long-staple cotton market is defying this logic because supply-side contraction is outpacing demand-side slowdown.
Long-staple cotton production is inherently limited, and planting area fluctuates with policy and economic returns. Before the 2025/26 new crop arrives, market-available high-quality long-staple cotton is already tight. With inland stocks depleted, mills are unwilling to cut prices even as high-count yarn orders soften—they know real buyers will have to restock eventually.