In early June, the imported yarn market showed a clear divergence signal: Indian cotton yarn prices moved downward first, while inventory levels at major Chinese ports continued to climb. For fabric mills and traders holding orders, this may signal a new window for price negotiation.
Price Side: Indian Yarn Leads Decline, Medium-to-High Counts See Largest Cuts
According to feedback from weaving mills and yarn traders in Guangdong, Jiangsu, and Zhejiang provinces, since early June, the ICE cotton futures主力合约 has been volatile and declining to around 75 cents per pound, directly impacting Indian domestic S-6 spot prices and CCI auction floor prices. As a result, Indian cotton yarn export prices have fallen more significantly than those of competitors such as Vietnam, Pakistan, and Indonesia.
Notably, the price adjustment for medium-to-high count yarns (combed 21S and above) has been considerably larger than for open-end yarns and coarse ring-spun yarns. This structural difference reflects greater destocking pressure on Indian mills in the high-count segment, consistent with the recent increase in arrivals of combed yarn at ports.
Policy Variable: Tariff Exemption May Reshape Indian Yarn Competitiveness
From June 1 to October 31, 2026, India has implemented a tariff exemption on cotton imports. This allows Indian mills to use high-grade U.S., Brazilian, or Australian cotton for spinning. Industry insiders believe this policy will significantly improve the quality stability and spinnability of Indian cotton yarn, making its cost-performance advantage more prominent compared to yarn from Vietnam, Pakistan, and other origins.
For Chinese buyers, this means Indian yarn in the coming months may be not only "cheaper" but also "better in quality." However, in the short term, port inventory pressure remains the core factor restraining price rebounds.
Inventory Side: Port Inflows Exceed Outflows, Buyer's Market Prevails
Survey data shows that since late May, imported yarn inventories at major Chinese ports have continued to grow modestly, with combined bonded and non-bonded stocks rising. Arrivals and warehousing of Indian, Uzbek, and Malaysian yarns have remained relatively high, with particularly notable accumulation of combed 21S and above medium-to-high count yarns.
Meanwhile, supply of Pakistani Siro yarn, as well as open-end and blended yarns from Vietnam, Malaysia, and Indonesia, remains ample. Spot sales exhibit clear "buyer's market" characteristics: yarn traders lack confidence to hold prices, and for firm orders or large quantities, they generally offer negotiated concessions.
Chain Transmission: Vietnam, Pakistan Yarn Prices Face Downward Pressure
The price cuts led by Indian yarn are putting pressure on the entire Asian cotton yarn export system. Industry sources believe that with ICE cotton futures hovering around 75 cents per pound, compounded by rising risks of U.S.-Israel-Iran conflict escalation, expectations of Fed rate hikes, and increasing pressure on global economic recovery, Vietnam and Pakistan yarn export prices will inevitably follow the Indian decline.
This means the overall price center of China's imported yarn market may shift downward in the next one to two months. For downstream weaving enterprises, this opens a window to reduce raw material costs. But for traders who stocked up at higher prices earlier, inventory devaluation risks are increasing.