When international cotton prices pulled back sharply in late August, the pricing logic for the imported yarn market began to be rewritten. According to feedback from traders and weaving mills in major coastal consuming areas such as Guangdong, Jiangsu, Zhejiang, and Fujian, since early September, yarn offers from Vietnam, India, Pakistan, Indonesia, and Uzbekistan have generally softened, with open-end and coarse ring-spun yarns seeing larger declines, while adjustments for C32S and above carded yarns and mid-to-high count combed yarns have been relatively moderate. This divergence stems from both the pass-through of raw material costs and differences in supply-demand structures across counts.
Event Background
The recent decline in offshore offers is not driven by a single factor. The sharp fluctuation and pullback of ICE cotton futures in late August directly weakened the cost support for yarn mills. Meanwhile, the renewed US-Iran conflict has impacted crude oil and natural gas prices, as well as shipping and trade flows, constraining order taking and exports for cotton products in Southeast Asian countries. More critically, domestic cotton prices in India and Pakistan have fallen continuously since early September, giving local mills more room to lower offers. The combination of these negative factors has forced major yarn mills in Vietnam, India, and Pakistan to cut prices first, while second- and third-tier brands have had to follow suit to avoid losing orders.
It is worth noting that the price competitiveness of different origins is undergoing subtle changes. Currently, Vietnam's FOB/CNF offers for OEC10S-21S are slightly lower than comparable products from India, Pakistan, and Indonesia, making them more competitive. This has attracted significant attention from enterprises in coastal regions such as Guangdong, Fujian, and Zhejiang that produce denim, knitted underwear, knitted fleece, home textiles, corduroy, and labor protection products. This indicates that in the low-count segment, Vietnam is capturing more market share in China through cost advantages.
Industry Impact
The contrast between declining offshore offers and firm domestic yarn prices is reshaping procurement decisions of coastal weaving mills. With the arrival of the traditional 'golden September and silver October' peak season, destocking at domestic mills has accelerated. Even as Zhengzhou Cotton Futures and domestic spot cotton prices fell, yarn mills did not follow with lower yarn prices; some large mills even raised open-end yarn ex-factory prices. This reflects confidence in peak-season demand but also widens the cost gap between cleared imported yarn and domestic yarn. For coastal weaving, fabric, and garment enterprises, export orders remain dominated by short, scattered, and small orders, making low-to-mid count imported yarn more attractive due to flexible delivery and price sensitivity. Spot market activity has noticeably increased, especially for low-to-mid count yarn from Vietnam, India, Pakistan, and Bangladesh. This 'external decline, internal stability' price structure is expected to continue attracting buyers to increase imported yarn usage in the short term, but they must also guard against inventory devaluation risks if offshore prices fall further.
From an industrial chain perspective, this round of offshore price cuts is not comprehensive. Mid-to-high count combed yarns have seen limited adjustments; India's JC60S and JC80S remain weak but stable due to few bonded or afloat offers and high costs. This suggests that price resilience in the high-end segment remains strong. Downstream enterprises seeking cost optimization should adopt differentiated procurement strategies based on product positioning.