The price balance between imported and domestic cotton yarn is tilting toward the import side. Since late August, ICE cotton futures have retreated, and cotton prices in India and Pakistan have fallen consecutively, pushing FOB and CIF quotes from Vietnam, Indonesia, Uzbekistan and other major suppliers lower. Domestic mills, however, have held prices firm as seasonal restocking accelerates, widening the landed-cost advantage of imported yarn.
Divergence in External Quotes
Customs and industry data show this round of adjustment is not uniform. Open-end yarn and coarse-count ring-spun yarn have seen steeper cuts, while carded yarn of C32S and above, along with medium-to-high count combed yarn, has adjusted more modestly. Indian JC60S and 80S remain weak but stable, constrained by scarce bonded and shipment offers and persistently high costs.
What does this divergence mean? For buyers, the cost-performance window for low-to-medium count yarn is opening, while bargaining room for high-count combed yarn remains limited. Vietnam's OEC10S-21S FOB and CNF quotes are slightly lower than comparable products from India, Pakistan and Indonesia, making them more competitive and drawing attention from denim, knit underwear, knit sweaters, home textiles, corduroy and labor-protection producers in Guangdong, Fujian and Zhejiang.
Some large-scale, branded mills took the lead in cutting quotes, with second- and third-tier brands following. This suggests pricing power is concentrating among leading suppliers, while smaller mills are more easily forced to concede when demand is soft.
Why Domestic Yarn Prices Hold Firm
Domestic cotton yarn quotes have not followed Zhengzhou cotton and spot cotton lower. A few large mills have even raised ex-factory prices for open-end yarn. The logic lies in faster destocking during the Golden September and Silver October period, giving mills little short-term pressure to cut prices.
But this firmness is not solid. Export orders remain dominated by short, scattered and small batches, and end demand has not shown a trend-level surge. If the peak season underperforms, the foundation for domestic mills' price holding will loosen, and the substitution effect of imported yarn could amplify.
For coastal weaving, fabric and garment factories, demand for low-to-medium count yarn from Vietnam, India, Pakistan and Bangladesh continues to recover, with spot trading relatively active. Buyers are locking in short-term yarn costs while preserving flexibility for fourth-quarter order uncertainty.
Upstream and Downstream Transmission
From an industrial-belt perspective, denim and knit enterprises in Guangdong, Fujian and Zhejiang have moved fastest. These factories use large volumes of low-to-medium count yarn and are price-sensitive, so the widened import advantage directly stimulates inquiries and restocking. Home textile and labor-protection firms in Jiangsu and Zhejiang are following, but at a gentler pace.
On the upstream side, lower cotton prices in India and Pakistan have freed up profit margins for spinners, but the US-Iran conflict has brought renewed disruptions to crude oil, natural gas, shipping and trade, constraining orders and exports for Southeast Asian cotton products. This means the decline in external quotes is not purely cost-driven; geopolitical and logistics risks still provide a floor.
For trading firms, the core of the current window is not betting on a one-way decline, but using the internal-external price gap for structural procurement. The import substitution logic for low-to-medium count yarn is clear, while high-count yarn still requires caution.