No, the black residue on the cloth after applying oil to your cast iron pan does not necessarily indicate poor quality. In fact, it is quite normal for the cloth to become black or discolored when applying oil to a cast iron pan, especially if the pan is new or hasn't been seasoned extensively.
The black residue is likely a combination of excess oil, residual seasoning, and any impurities present on the surface of the pan. As you apply oil to the pan, it may loosen some of these particles, resulting in the discoloration on the cloth.
To minimize the amount of residue transferred to the cloth, make sure you are not using too much oil when applying it to the pan. You only need a thin, even layer to maintain the seasoning and protect the cast iron.
It's also worth noting that as you continue to use and season your cast iron pan, the black residue on the cloth should reduce over time. The seasoning layer will become more established, creating a smoother and more non-stick surface.
Remember to clean your cast iron pan thoroughly after each use by gently scrubbing it with hot water and a brush or sponge. Dry it completely and apply a thin layer of oil or fat before storing to prevent rust and maintain the seasoning.
If you have concerns about the quality of your cast iron pan, it's a good idea to check for any visible defects or damage that could affect its performance. Otherwise, the presence of black residue on the cloth alone is not necessarily an indication of poor quality.