The China Cotton Textile Sentiment Index came in at 49.6 in August 2026, below the 50 threshold and down 0.1 point month-on-month. At the same time, the global manufacturing PMI has stayed in expansion territory for 13 consecutive months, and China's manufacturing PMI rebounded to 49.8, just shy of the critical mark. Such a stark temperature gap suggests the cotton textile industry's problem lies not in macro demand but in cost transmission and order structure.
Raw Materials: Prices Rise, Procurement Diverges
August's raw material market was defined by broad-based price gains. Zhengzhou cotton futures' main contract CF2701 touched 17,345 yuan/ton at its high, while the domestic 3128-grade cotton spot monthly average reached 17,680 yuan/ton, up 1.95% month-on-month. Polyester staple fiber, driven by surging oil prices and tight PTA and MEG supply, climbed from 7,500 yuan/ton to around 8,200 yuan/ton, with the monthly average rising 3.40%. Viscose staple fiber, supported by low inventories, held firm with major producers quoting up to 14,550 yuan/ton.
Procurement behavior, however, diverged sharply. The cotton procurement index stood at just 49.9, still below the threshold, while the non-cotton fiber procurement index reached 50.1, barely above the line. Mills showed strong resistance to high-priced cotton, shifting toward polyester and viscose substitutes. The logic is straightforward: end-product prices cannot keep pace with rising costs, leaving factories to hedge through fiber blending adjustments.
Production and Sales: Yarn Strong, Fabric Weak, Inventory Shifts
The production-side divergence is more alarming than the raw material story. The yarn output index registered 51.0 in August, up 0.3 points and still in expansion territory. The fabric output index, however, came in at only 48.0, down a sharp 2.9 points month-on-month. The loom utilization rate index stood at 49.6, also below the threshold.
What does this mean? Spinning mills are still operating normally, but the weaving segment has begun to contract. The benchmark 32-count combed cotton yarn averaged 23,568 yuan/ton in August, up 0.86% month-on-month. Pure cotton grey fabric averaged 7.36 yuan/meter, up only 0.27%. Yarn prices are rising notably faster than fabric prices, squeezing weavers' margins from both ends and making production cuts a rational choice.
Sales also showed a "stable volume, weak price" pattern. The yarn sales volume index was 50.2, and the fabric sales volume index was 50.0, both retreating from July. The product inventory index came in at 49.3, down 0.9 points month-on-month, indicating that textile mills' product inventories are rising. Both the yarn and fabric inventory indices stood at 49.3, below the threshold. Inventory is shifting from spinning mills to weaving mills. If end-consumer demand fails to catch up in time, September could face passive inventory accumulation.
Business Operations: Profit Gains Mask Revenue Contraction
The business operation index was 50.1, barely above the threshold but down 0.7 points month-on-month. Sub-indices reveal a contradictory combination: the operating revenue index was 49.8, down a sharp 2.8 points, while the total profit index was 50.3, up 1.3 points.
Revenue contracting while profit improves typically stems from raw material inventory appreciation or temporary product mix adjustments, not substantive demand recovery. The business confidence index was 46.7, up 0.9 points month-on-month but still the lowest among the seven sub-indices. Mills remain broadly cautious and watchful, with muted expectations for the traditional peak season.
The global manufacturing recovery backdrop is undeniable, with the JPMorgan Global Manufacturing PMI at 52.3, above the boom-or-bust line for 13 straight months. But the cotton textile industry's sentiment depends more on end-consumer apparel demand than on the broader manufacturing investment cycle. Downstream apparel brands are placing conservative orders, with fabric procurement dominated by short and urgent orders, making it difficult for mills to form stable production schedules.