In the final week of June 2026, the Puyuan wool yarn market delivered a classic off-season performance: transaction volumes shrank, prices remained flat overall, with only a few non-mainstream categories showing anomalies. For the upstream and downstream players reliant on wool sweater production and exports, this signals that the coming month may become a window for active destocking and price negotiation.
Volume-Price Divergence: The Logic Behind 'Volume Down, Price Stable' for Mainstream Categories
According to public market data, from June 23 to 29, the transaction volume of all-wool knotless yarn declined significantly, yet the transaction prices for mainstream specifications such as 32s, 42s, and 48s remained unchanged from the previous week, staying in the range of 81,700-83,700 yuan/ton. This combination of 'volume down, price stable' is not uncommon in textile raw material markets, typically reflecting a wait-and-see strategy from both supply and demand in the off-season—factories are reluctant to cut prices, while buyers replenish only as needed without building inventory.
Notably, prices for all-wool acrylic knotless yarn, worsted wool yarn, and domestic wool worsted yarn also remained unchanged. Across the entire price list, more than 30 specifications showed zero weekly price change. This complete stagnation is more indicative of a market lacking direction than individual price declines.
Localized Cost Pass-Through: Why High-Elastic Cotton Rose Against the Trend
Amid the overall price silence, high-elastic cotton became the only bright spot. Its price range moved slightly upward from 20,500-21,100 yuan/ton last week to 20,700-21,200 yuan/ton, an increase of about 100-200 yuan/ton. Although the absolute increase is modest, it stands out sharply in an otherwise weak market.
High-elastic cotton is not a mainstream product in the wool yarn market; its main use is as a decorative or auxiliary material in sweater production. The direct driver of this price increase is the firmness of upstream raw materials. This phenomenon reveals an industry rule: in the off-season, non-mainstream categories are more susceptible to direct cost-side shocks, because their downstream demand is less elastic and substitutes are fewer, giving producers stronger bargaining power to pass cost pressures downstream.
Operating Rate Decline: Is 75% a Warning Line or the New Normal?
The three regions of Wujiang Hengshan, Jiaxing Honghe, and Tongxiang Puyuan represent China's most concentrated wool sweater industry clusters. As of June 29, the comprehensive operating rate of knitting machines in these areas had dropped to about 75%. This figure is moderately low compared to historical data for the same period in previous years. The decline in operating rates indicates reduced end-order demand, directly suppressing procurement demand for wool yarn raw materials.
For wool yarn traders and spinning mills, a 75% operating rate is a signal that warrants caution. When the operating rate falls below 70%, factories often take the initiative to cut prices to reduce inventory. The current 75% level is still in the 'production cut to maintain price' negotiation zone, but the downward trend suggests an increasing probability of subsequent price concessions.
Outlook for Next Week: Continued Volume Contraction, Growing Price Adjustment Pressure
Based on current market signals, the industry generally expects further declines in wool yarn transaction volumes next week (June 30-July 6). Three reasons:
- Seasonal factors: July is the traditional off-season for wool sweater production, with new orders from downstream garment factories typically not released until late August.
- Slow inventory digestion: Current price stability has not stimulated replenishment; instead, it encourages downstream buyers to purchase on an as-needed basis.
- Weakening cost support: If upstream raw material prices for wool and acrylic begin to soften, the price adjustment space for yarns will open up quickly.
In terms of prices, a 'structural adjustment' rather than an overall decline is expected. High-end all-wool yarns, due to rigid raw material costs, have limited room for downward adjustment. In contrast, blended and imitation wool categories, with larger profit margins, may be the first to offer concessions of 100-300 yuan/ton.