Guosen Securities(SZ:002736) Guo Xin Qi Huo·2025-09-28 13:47Report Summary 1) Report Industry Investment Rating No information provided. 2) Core Viewpoints of the Report - Domestically, in the fourth quarter, with new cotton hitting the market, the expected output is over 7.3 million tons, subjecting Zhengzhou cotton futures to significant hedging pressure. Consumption during the "Golden September and Silver October" period was lackluster, but the overall industrial chain showed slight improvement with gradually decreasing finished - product inventories. The price range is expected to be between 12,500 - 15,000 yuan/ton [1][38]. - Internationally, macro - factors still bring great uncertainty to the cotton market. The Fed may cut interest rates within the year, potentially supporting US cotton prices. Fundamentally, the supply of cotton in the Northern Hemisphere will gradually increase in the fourth quarter, while consumption remains stable, with no major fundamental contradictions. The operating range of US cotton is expected to be between 60 - 75 cents/pound [2][38]. - The recommended operation strategy for Zhengzhou cotton is mainly band trading [3][39]. 3) Summaries by Relevant Catalogs a) Market Review - In the third quarter of 2025, Zhengzhou cotton futures showed a trend of weakening in a range and then breaking down. The price of the main contract was roughly between 13,450 - 14,350 yuan/ton. Influenced by factors such as good cotton growth in Xinjiang, extension of the Sino - US tariff suspension period, and Fed's interest - rate cut expectations, the price fluctuated [5]. - In the third quarter of 2025, ICE US cotton showed a weakening trend in a range, with the main contract price between 65.8 - 69.50 cents/pound. Affected by factors like high Brazilian cotton exports, Indian tariff exemptions, and changes in US weather and USDA reports, the price fluctuated [6]. b) Domestic Market Analysis - Supply: Most institutions predict an increase in the cotton planting area in the 2024/25 season, mainly driven by the expansion in Xinjiang. The comprehensive meteorological conditions in the cotton - growing areas were favorable, laying a good foundation for an increase in yield. Different institutions have different yield forecasts, with the report's estimate ranging from 7.3 - 7.7 million tons. The final yield depends on the weather during the harvest period, but a bumper harvest is likely [8][10][11]. - Seed - cotton Purchase Price: As of September 22, 2025, the average boll - opening rate in Xinjiang was about 83.2%. The expected purchase price of machine - picked seed cotton is 6.2 - 6.4 yuan/kg, and the current purchase price of hand - picked seed cotton is around 7.2 yuan/kg. Zhengzhou cotton futures above 14,000 yuan/ton face significant hedging pressure [14]. - Imports: In August 2025, China imported 70,000 tons of cotton, a 40% increase from the previous month but a 51.6% decrease year - on - year. From January to August 2025, the cumulative import was 590,000 tons, a 72.6% year - on - year decrease. Future imports are expected to show a short - term month - on - month slow increase and a long - term low - level oscillation, with an annual import volume of about 1.2 - 1.4 million tons [19]. - Industrial Chain Operation: Since September, the decline of Zhengzhou cotton futures has affected textile enterprises' sentiment, with cotton yarn prices dropping by 100 - 200 yuan/ton. However, the decline in cotton yarn prices was smaller than that of cotton, widening the cotton - yarn price spread and slightly improving textile enterprises' profits. The operating rate of textile enterprises did not rise significantly during the peak season, while that of weaving enterprises increased relatively significantly. Since August, the finished - product inventories of both types of enterprises have been decreasing [21][25][27]. c) International Market Analysis - Global Supply and Demand: According to the USDA's September cotton supply - demand report, in the 2025/26 season, global cotton production, consumption, and trade volume are expected to increase, while the beginning and ending inventories will decrease. The ending inventory will reach a four - year low [30]. - Fed's Interest - rate Policy: The Fed cut interest rates by 25 basis points as expected. There are still two interest - rate meetings in 2025, and most Fed members expect two more interest - rate cuts totaling 50 basis points within the year. The expectation of interest - rate cuts may lead to a weaker US dollar, which may support US cotton prices [34].