On June 29, 2026, the benchmark price of cotton yarn 21S settled at 23,400 CNY/ton, marking the highest level in the past year. The price is 1,633.33 CNY higher than the yearly low of 21,766.67 CNY/ton, representing a 7.5% increase. For mid-stream textile mills, this signals a shift from low-cost to high-cost raw material environment, while downstream buyers face intensified pressure on cost control.
Supply-Demand Dynamics Behind the Price Shift
The annual price range for cotton yarn 21S spans from 21,766.67 to 23,400 CNY/ton, with a median of 22,583.34 CNY/ton. The current price is about 3.6% above the median, driven by tight upstream cotton supply and a recovery in downstream restocking demand. According to public data from China's National Bureau of Statistics, domestic cotton output in the 2025/2026 season declined slightly, while textile export orders rebounded in Q2, boosting demand for cotton yarn.
Importantly, the current price sits near the top of its one-year range. Historical data shows that when cotton yarn prices reach such highs, downstream weaving mills often adjust operating rates—some small and medium-sized mills may cut capacity or delay raw material purchases in anticipation of a correction.
Ripple Effects on Industrial Clusters
The price signal is already triggering reactions in major textile clusters. In Nantong's home textile hub, some companies are recalculating grey fabric costs and considering passing part of the increase to finished bedding prices. In Shaoxing's weaving zone, where cotton yarn accounts for a high proportion of fabric costs, gross margins are being squeezed to multi-year lows.
On the export front, inquiries from Southeast Asian buyers—such as those in Bangladesh and Vietnam—rose in June, but actual order negotiations have lengthened. This indicates high price sensitivity among international buyers; if Chinese cotton yarn prices remain elevated, there is a risk of order diversion to lower-cost origins like India and Pakistan.
Risks and Strategies at High Price Levels
Although the daily change is zero, the high price level itself warrants caution. The Textile Circle editorial team notes that in the past two years, cotton yarn 21S has triggered over-shoot warnings, often followed by a price pullback. For weaving mills and garment companies reliant on cotton yarn, now is not the time for bulk stockpiling but rather for shortening inventory cycles and improving cash flow efficiency.