Diverging Textile Raw Material Market at Golden September Start: A Tug of War Between Cost Support and Weak Demand

In early September, the textile raw material market entered the traditional 'Golden September' window, but performance diverged sharply: Zheng cotton futures hovered around 17110 yuan/ton, while the spot 3128B index fell 53 yuan to 18357 yuan/ton, widening the futures-spot spread to over 1200 yuan; polyester staple fiber surged 200 yuan to 8080 yuan/ton, outpacing cotton. This divergence is not accidental but a natural outcome of cost-push versus demand-pull, signaling the industry chain is entering a phase of intensified long-short gaming.

Background The cotton market shows a classic 'strong expectations, weak reality' pattern. Futures are supported by tight supply expectations before new cotton arrives, with some Xinjiang ginners initiating seed cotton pre-purchases, raising focus on output and costs. However, spot trading is sluggish, with mills avoiding bulk stockpiling and old cotton consumption slow. As northern Xinjiang harvest approaches, concentrated supply will pressure prices, limiting upside and likely keeping cotton range-bound.

Cotton yarn exhibits 'firm prices, divergent orders.' Futures ticked up, spot prices rose, but recovery is limited—big orders haven't materialized, with transactions mostly small and short-term. Structurally, medium-to-high count compact yarns sell well, while low-count yarns face pressure and inventory buildup. Procurement behavior splits: small mills buy hand-to-mouth, while large and medium mills replenish moderately using post-pricing to lock costs. Downstream fabric mills' operating rates have recovered slowly, and gray fabric inventories remain high, so further yarn price increases hinge on sustained end-order growth.

Polyester staple fiber (PSF) is the recent highlight, driven by cost: upstream PTA and ethylene glycol strengthened, plus maintenance shutdowns and production cuts tightened supply. But demand hasn't exploded; weavers buy only for immediate needs. Short-term cost support persists, but watch for feedstock pullbacks or restart of shut units adding supply. The rally's sustainability depends on real downstream consumption.

Industry Impact The 'strong raw materials, weak demand' pattern affects all chain links. Upstream suppliers enjoy cost support but face squeezed margins as price hikes can't pass through. Midstream mills face higher operational risk from volatile costs; wider futures-spot spreads offer hedging opportunities, but small firms lacking expertise may suffer chasing rallies. Downstream weaving and apparel face higher input costs without pricing power due to weak orders, squeezing profits.

Procurement strategies must be differentiated. Cotton direction awaits new crop arrivals; cotton yarn depends on autumn/winter order fulfillment; PSF tracks petrochemical feedstocks. Blindly chasing highs is risky; need-based purchasing and batch replenishment are prudent. The widened spread also suggests using futures for hedging, but beware basis risk.

Practical Advice ### For Purchasers - Stick to need-based purchasing; avoid panic stockpiling on short-term spikes, especially for cotton and cotton yarn. - Monitor new cotton harvest progress and output expectations; if supply pressure emerges, consider replenishing on dips. - For PSF, closely track PTA/MEG prices and plant operations; lock costs in batches on pullbacks.

For Foreign Trade Enterprises - Factor in raw material volatility when quoting; use floating prices or post-pricing to transfer risk. - Prioritize orders for fast-moving categories like medium-high count yarns; avoid low-count yarn inventory pressure. - Use futures for hedging to lock future raw material costs, but set stop-loss levels.