Price trend

Recently, domestic cotton prices have fluctuated narrowly. According to the Commodity Market Analysis System of SunSirs, as of January 6th, the spot price of 3128B grade cotton was 14,680 RMB/ton, unchanged from the beginning of the month and down 3.27% month on month.

Analysis review

In terms of the domestic market, it is temporarily in a peak supply period with significant inventory pressure. The high yield of domestic cotton this year has become a certainty, and the progress of picking, selling, and processing new cotton this year was relatively fast. As of January 5, 2025, Xinjiang had processed a total of 6.07 million tons of cotton, a year-on-year increase of nearly 20%. The commercial inventory of cotton that enters the circulation after processing has significantly increased.

As of January 3, 2025, the total commercial inventory of cotton was 5.1924 million tons, an increase of 126,600 tons compared to the previous week. Overall, some cotton ginning factories in Xinjiang have completed the processing of cotton skins, and downstream textile enterprises were orderly purchasing raw materials. The order volume was limited, and under the background of urgent replenishment, the outbound quantity of cotton skins was less than the inbound quantity. It is expected that the national commercial inventory will continue to increase next week.

In the international market, the US cotton market has fluctuated and fallen. According to USDA data, the net signing of land cotton for the year 2024/25 in the United States was 29,234 tons from December 20th to December 26th, a decrease of 54% compared to the previous week. The shipment volume was 26,263 tons, a decrease of 18% compared to the previous week. The export data of US cotton was poor, with a significant decrease in contract volume compared to the previous period, and the demand outlook still worried the market. Market analysis showed that due to the strengthening of the US dollar and a decrease in demand, the commodity market had remained low.

In terms of downstream demand: As the Spring Festival approaching, orders in the textile market were still relatively scarce, and the pre holiday replenishment feature was not obvious. The operating rate of textile enterprises was 60-70%. The increase in orders for the spring and summer of 2025 in the domestic demand market was significantly lower than expected, and yarn transactions were sluggish. Some downstream enterprises have planned to start their holidays around mid January, and the operating rate may further decline.

Market outlook

Due to the fast progress of new cotton sales this year, the pressure on the supply side has advanced, and the short-term fundamentals continued to be weak. The new cotton market continued to increase in volume. If there is no obvious demand for downstream replenishment before the Spring Festival, textile companies are expected to take early holidays. Without improvement on the demand side, cotton prices are expected to continue to consolidate at a low level.

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