Last week, domestic cotton prices continued to rise, albeit at a slightly narrower pace, while international cotton prices continued to decline, widening the price gap between domestic and international cotton to a new ten-year high. According to the commodity market analysis system of Business Society, as of February 2, the spot price of 3128B-grade cotton was 16,090 yuan per ton, up 0.58% from the previous Monday. The sales progress of new domestic cotton has been relatively fast, downstream textile enterprises have been actively replenishing stocks, and ginning and trading companies have shown strong price support, keeping spot prices firm. As of January 29, the national sales rate of new cotton reached 64.5%, an increase of 22.9 percentage points year-on-year.

Last week, international cotton prices faced downward pressure and fell, hitting a near ten-month low at one point. The average weekly settlement price of the ICE cotton futures main contract was 63.44 cents per pound, down 0.64 cents per pound or 1.0% from the previous week. Driven by the "strong domestic, weak international" trend, the weekly average price difference between domestic and international cotton has expanded to nearly 3,200 yuan per ton, reaching a new high in nearly a decade. This has given imported cotton yarn a significant cost advantage over domestic cotton, continuously squeezing the market share of domestic cotton and posing significant pressure on the upward movement of domestic cotton prices.

As the year-end approaches, the downstream segment of the cotton industry chain has entered a typical pre-Spring Festival mode. Downstream weaving mills and traders are nearing the end of their stock replenishment, while spinning enterprises are purchasing cotton at low prices to build up inventories. With sales slowing down ahead of the holiday, production enthusiasm has declined, and the holiday atmosphere is gradually intensifying. Production restrictions and shutdowns are entering a "countdown" phase, with some companies planning early holidays. The short-term demand engine in the cotton market has clearly stalled, constituting the primary short-term pressure currently suppressing cotton prices.

Overall, cotton prices are currently caught in an intense tug-of-war between "strong expectations" (future production cuts) and "weak reality" (current off-season demand). Under the expectation of reduced production in the new year, the market maintains a bullish outlook, providing underlying support for cotton prices. However, as the Spring Festival approaches, the short-term market will be dominated by the "weak reality," and cotton prices are expected to remain weak or consolidate within a narrow range, lacking upward momentum.