When the pace of declines in overseas yarn offers outpaces domestic spot adjustments, the price structure between imported and domestic yarns begins to shift subtly. Based on feedback from traders and weaving mills in Guangdong, Jiangsu, Zhejiang, and Fujian, since late August, a pullback in ICE cotton futures, combined with rising crude oil, natural gas, and shipping costs due to the US-Iran conflict, has squeezed Southeast Asian cotton yarn exports. Consequently, FOB/CNF/CIF offers from Vietnam, India, Pakistan, Indonesia, and Uzbekistan have generally declined moderately, with larger drops in open-end and coarse ring-spun yarns, while C32S and above carded and medium-to-high count combed yarns saw smaller adjustments.
The price correction is not uniform but structurally stratified. Low-count yarns (e.g., OEC10S-21S) fell the most due to weak demand and inventory pressure, while high-count yarns (e.g., JC60S, JC80S) remained largely stable due to scarce bonded and afloat positions and high production costs in India. This stratification reflects divergent supply-demand dynamics: low-count markets are more competitive with ample substitutes, making prices elastic; high-count yarns face rigid costs and limited capacity.
Notably, large-scale mills initiated price cuts, forcing second- and third-tier brands to follow, indicating that leading players are proactively sacrificing margins to secure orders, while smaller mills are in a reactive position. This transmission could accelerate industry consolidation, as less cost-competitive mills lose market share.
Regionally, Vietnamese yarn offers in low-count categories are now noticeably lower than those from India, Pakistan, and Indonesia, significantly enhancing their competitiveness. Coastal enterprises in Guangdong, Fujian, and Zhejiang—producing denim, knitted underwear, fleece, home textiles, corduroy, and workwear—have shown increased interest in Vietnamese OEC10S-21S. This suggests Vietnam, with tariff advantages and stable power supply, is eroding South Asian market share in low-count yarns.
Meanwhile, the price gap between imported and domestic yarns is widening. During the domestic peak season (September–October), mills have accelerated destocking, with some large mills even raising open-end yarn ex-factory prices, while imported yarn costs have fallen with overseas offers, enlarging the positive spread. This structure makes imported yarn more cost-effective for coastal weaving mills, particularly for price-sensitive low- and medium-count demand.
For weaving and fabric mills, the current price correction offers a window to lock in lower raw material costs. However, caution is warranted as export orders remain dominated by short, scattered, and small orders; large-scale stockpiling may face demand volatility. Additionally, US-Iran conflict-induced shipping and energy uncertainties could affect delivery schedules.
For domestic yarn mills, peak-season destocking alleviates cash flow pressure, but persistently low imported yarn prices may cap domestic price increases. If overseas offers continue to fall, domestic mills may face a dilemma between raising prices and losing orders, or cutting prices and incurring losses. In the long run, domestic mills need to pursue product upgrading and differentiation to avoid direct price competition with imported yarns.