China's new crop cotton prices have plunged to two-year lows. As of September 12, the average spot price (landed-the-mill) of T328 had fallen to 13,238 yuan per ton, the lowest level since October 2007; however, at individual mill locations, prices have taken a more severe tumble. New crop lint is proving to be a bearish influence, with seed cotton prices enabling ginners to sell the lint at 12,500 to 12,600 yuan per ton and realize a profit. Even at these discounted prices, mills are still not aggressively buying.
In Shandong Province, the largest cotton-spinning operation, Weiqiao Textiles, just announced their procurement prices (released as a temporary price). Grade 2 color lint (equivalent of strict middling) procurement prices are 12,800 yuan per ton, while Grade 3 (equivalent of middling) is 12,600 yuan per ton -- both have a 10.5% moisture limit. Smaller mills are requiring up to 60 days finance on purchases.
