**Cotton Market Overview** **Market News & Key Data** Futures: The closing price of Cotton 2601 contract was 13,860 yuan/ton, up 80 yuan (+0.58%) from the previous day. Spot prices: Xinjiang 3128B cotton delivered price was 14,835 yuan/ton (+5 yuan), with a spot basis of CF01+975 (-75). The national average price for 3128B cotton was 15,013 yuan/ton (+9 yuan), with a spot basis of CF01+1,153 (-71).

Recent updates indicate weak demand from Pakistani yarn mills, with local cotton prices consolidating. Ginners remain reluctant to sell high-grade inventory, while low-grade cotton trades at discounts of 500–1,500 rupees/maund, offering mills restocking opportunities. Yarn mills report heavy operational pressure and squeezed margins. On Dec 10, the Karachi Cotton Association (KCA) stabilized its 2025/26 spot price at 15,500 rupees/maund.

**Market Analysis** Zheng cotton futures showed resilient volatility. Globally, Northern Hemisphere new-crop supplies pressure ICE cotton amid sluggish textile demand. While U.S. cotton’s low valuation limits further downside, upside catalysts remain unclear. Domestically, China’s 2025/26 cotton output is expected to rise as Xinjiang harvesting nears completion. Seasonal inventory buildup and ample supply may cap Zheng cotton’s gains, though improved spinning margins and manageable inventory prevent steep declines.

**Strategy**: Neutral. Short-term range-bound trading expected. Long-term optimism hinges on downstream capacity expansion and tight imports. Monitor China’s 2026 cotton target price policy. **Risks**: Macro/policy shifts, weather in key producing regions.

--- **Sugar Market Overview** **Market News & Key Data** Futures: Sugar 2605 contract closed at 5,245 yuan/ton (-83 yuan, -1.56%). Spot prices: Guangxi Nanning sugar was 5,370 yuan/ton (unchanged), basis SR05+125 (+83); Yunnan Kunming sugar was 5,340 yuan/ton (unchanged), basis SR05+95 (+83).

Brazil’s Williams data showed sugar shipment queues fell to 44 vessels (vs. 53 prior week), with waiting volume down 17.14% to 1.51M tons. VHP sugar volume dropped 21.3% to 1.23M tons. Santos port shipments declined 8.97% to 882,200 tons, while Paranaguá fell 47.77% to 249,600 tons.

**Market Analysis** Zheng sugar futures weakened. Global surplus weighs on ICE sugar, though downside may be limited. Domestic output is rising as Guangxi mills ramp up crushing. High Brazilian import margins and October’s elevated imports sustain supply pressure. Stricter syrup controls had limited impact; monitor import trends.

**Strategy**: Neutral. Weak fundamentals persist, but low valuations and mill pricing support may curb declines. Watch liquidity-driven volatility. **Risks**: Macro factors, weather, policy changes.

--- **Pulp Market Overview** **Market News & Key Data** Futures: Pulp 2605 contract surged 2.76% to 5,586 yuan/ton (+150 yuan). Spot prices: Chile’s Silver Star needle pulp in Shandong was 5,590 yuan/ton (+90), basis SP05+4 (-60); Russian needle pulp was 5,115 yuan/ton (+110), basis SP05-471 (-40).

Import pulp prices firmed, with ShFE-led gains driving trade offers up 50–120 yuan/ton for needle pulp. Tight broadleaf supply spurred hikes of 50–100 yuan/ton. Hardwood and BCTMP prices stabilized.

**Market Analysis** Pulp futures rallied on supply disruptions. Domtar permanently closed Canada’s 380K-ton Crofton mill, while Finland’s Rauma mill (650K tons) will halt production Dec 15–Jan 7. Europe’s October port stocks fell, signaling demand recovery. Domestically, paper overcapacity and weak consumption keep mills cautious, with high port inventories.

**Strategy**: Neutral. Short-covering and supply shocks fueled gains, but unimproved fundamentals may limit upside. Monitor remaining Russian needle pulp contracts. **Risks**: Macro risks, overseas price volatility, FX fluctuations.