Night Session Divergence: Industrial Logic Behind Polyester Chain Strength and Cotton Pressure

Night session data on June 5 reveals a clear divergence in textile raw material markets: PTA main contract rose 0.93% to 6,304 points, staple fiber gained 0.62% to 7,752 points, while cotton main contract fell 0.50% to 15,940 points and cotton yarn dropped 0.33% to 22,360 points. This is not a simple fluctuation but a concentrated reflection of differences in cost transmission, demand expectations, and supply patterns within the industry chain.

Short-term Support and Mid-term Concerns for the Polyester Chain

The night session gains in PTA and staple fiber are primarily driven by the stabilization of upstream crude oil prices. Recent OPEC+ production cut expectations, combined with peak summer driving demand in North America, have pushed crude oil prices slightly higher, directly boosting the cost side of PX and PTA. Additionally, several domestic PTA plants entered scheduled maintenance in early June, tightening market supply and amplifying price elasticity.

Staple fiber, as a direct downstream product of PTA, has seen its price rise mainly through cost-push pass-through. Current operating rates in Jiangsu and Zhejiang staple fiber mills remain around 80%, but downstream weaving enterprises show no significant increase in purchasing willingness, mostly restocking on a need-only basis. This means the sustainability of staple fiber gains depends on whether end-order demand can pick up during the traditional off-season from late June to July. Should crude oil retreat, staple fiber could correct more sharply than PTA.

For textile enterprises, the current strength in PTA and staple fiber is more a story of cost and supply than of genuine demand recovery. Buyers should be wary of chasing highs, especially near the 7,750 yuan/ton staple fiber level, and should approach hedging positions with caution.

Cotton Decline: Dual Pressure from Bumper Harvest Expectations and Weak Demand

In stark contrast to the polyester chain's gains, cotton futures fell 0.50% in night trading, breaking below the 16,000 yuan/ton psychological level. This move reflects continued market pricing of a global oversupply for the 2025/26 season.

On the supply side, the latest USDA planting intentions report shows increased U.S. cotton acreage for the new season, and favorable weather conditions in major growing regions support expectations of a bumper harvest. In Xinjiang, despite earlier low temperatures affecting seedling growth, recent warming has allowed replanting to proceed orderly, keeping overall production risk manageable.

Demand faces dual pressure domestically and internationally. Domestically, textile and apparel retail growth has slowed since May, with gray fabric inventory accumulation accelerating, making weaving mills cautious in cotton yarn procurement. Internationally, intensified competition from Southeast Asian textile capacity has led some global brands to shift orders to Vietnam and Bangladesh, resulting in shrinking export orders for Chinese cotton yarn and gray fabric. The decline in cotton yarn futures is a direct transmission of this weak demand along the chain.

Industrial Strategies Amid Divergence

The current divergence between PTA/staple fiber and cotton/cotton yarn essentially reflects asynchronous inventory cycles across different industry chain segments. The polyester chain is near the end of active destocking, making prices sensitive to cost changes, while the cotton chain faces passive inventory accumulation pressure, making prices prone to decline.

This divergence pattern is expected to persist until supply-demand imbalances in both chains converge. For textile enterprises, this means procurement plans can no longer treat bulk raw materials uniformly but must adopt differentiated strategies based on each material's industrial logic.

For Buyers - For polyester raw materials (PTA, staple fiber), current prices already partially reflect cost positives. Maintain need-only procurement and avoid large positions above 7,500 yuan/ton for staple fiber. Watch for correction opportunities after maintenance ends in late June. - For cotton, prices below 16,000 yuan/ton offer some safety margin, but given supply pressure before new crop arrival, adopt a phased purchasing strategy with limited single-batch volumes. Increase use of import cotton quotas to hedge against domestic cotton weakness.

For Foreign Trade Companies - Monitor RMB exchange rate fluctuations' erosion of export order profits. During cotton price downturns, shorten quotation validity periods to avoid margin inversion from raw material price declines after order acceptance. - Use night session futures for price locking. Establish short hedges on PTA and staple fiber futures to lock in raw material costs for export orders; defer hedging on cotton futures until clearer bottom signals emerge.