The main cotton futures contract closed the morning session on June 30 with a 1.42% gain, settling at 16,115 points. This movement was not isolated; related products such as cotton yarn, staple fiber, and PTA also posted gains, signaling a collective rebound in the textile raw material market after a period of adjustment.
Market Performance and Linkage Morning session data showed cotton yarn futures (2609 contract) rising 1.12% to 22,650 points, staple fiber (2608 contract) up 0.63% to 7,008 points, PTA (2609 contract) climbing 1.38% to 5,584 points, and bottle-grade chip (2609 contract) edging up 0.42% to 6,682 points. The price correlation among these products reflects how cotton, as a key upstream raw material, directly influences cotton yarn, while the synchronization of PTA and staple fiber highlights the sensitivity of the chemical fiber segment to changes in polyester feedstock costs.
This rally is not broad-based but rather structurally driven by upstream strength. Cotton and PTA posted larger gains than staple fiber and bottle-grade chip, indicating that cost-side factors—rather than end-user demand—are the primary catalyst. For spinning mills, rising cotton prices mean higher procurement costs, but whether these can be passed downstream to grey fabric and garments depends on actual order volumes.
Industrial Cluster Perspective: Inventory vs. Operating Rates Feedback from major textile clusters suggests limited impact from weather on Xinjiang cotton production estimates for the new season. Downstream weaving hubs like Shengze and Nantong continue to hold relatively high grey fabric inventories, with loom operating rates hovering between 60% and 70%, showing no signs of a stockpiling frenzy. This implies that the futures rally is more a short-term convergence of capital flows and sentiment rather than a fundamental shift in industry fundamentals.
For cotton yarn traders, the upward price movement may trigger some basis-fixing restocking, but the risk of large-scale hoarding remains. In the staple fiber segment, polyester plant sales-to-output ratios have stayed at moderate levels, and downstream polyester yarn mills continue to adopt a just-in-time procurement approach, with no evidence of chasing prices.
Driving Logic: Macro and Supply-Demand Balance Another factor behind this rally is improving macro sentiment. The recent stabilization of crude oil prices has buoyed the entire chemical complex, providing cost support for PTA. Meanwhile, the continuation of domestic pro-growth policies has lifted expectations for textile and apparel consumption in the second half of the year.
However, caution is warranted as export data show no significant improvement. According to public Customs data, while textile and apparel exports posted a month-on-month increase in May, they remain low year-on-year. The destocking process in European and American retail channels is slow, and the return of orders from Southeast Asia is limited, all of which will cap the upside potential for raw material prices.