The imported yarn market is undergoing a quiet structural shift. Data for May 2026 shows China's total cotton yarn imports reached approximately 172,200 tons, down 14.03% month-on-month but still up 71.75% year-on-year. More notably, Pakistani cotton yarn imports hit 21,310 tons, a marginal 0.01% increase month-on-month but a staggering 80.36% year-on-year surge, making Pakistan the only major source country to maintain positive monthly growth.
Pakistan's Comeback: Dual Advantages of Price and Geography
Pakistani yarn's strong performance is no accident. Public customs data reveals that Vietnam and India, traditional import giants, exported 82,050 tons and 22,430 tons respectively to China in May, down 11.83% and 29.38% month-on-month. Behind Pakistan's counter-trend growth lies a combination of factors.
On the pricing front, the Pakistani rupee's persistent depreciation against the US dollar directly lowers export costs. Additionally, domestic cotton prices in Pakistan saw continuous sharp declines in mid-June, while mill operating rates rebounded after improved energy supply, intensifying export pressure and further depressing quotes. For Chinese mills, this enhances the cost-effectiveness of Pakistani yarn.
Geopolitical factors also play a role. Conflicts involving the US, Israel, and Iran have diverted some low-margin, low-count orders from Southeast Asia back to China. These cost-sensitive orders align perfectly with Pakistani yarn's low price advantage. Moreover, the 'two-way flow' mechanism in cotton yarn and fabric trade between China and Pakistan smoothens supply chains, with shorter transport distances and faster delivery cycles adding to its appeal.
Open-End Yarn Struggles: Volume and Price Decline Amid Demand Void
In contrast to Pakistani yarn's strength, the open-end spinning yarn market faces simultaneous volume and price declines. Feedback from weaving mills and yarn traders in Guangdong, Jiangsu, Zhejiang, and Shandong indicates sluggish inquiries and transactions for both bonded and forward cargo open-end yarn. FOB/CNF/CIF quotes from Vietnam, Indonesia, Malaysia, and India continue to edge down but fail to stimulate demand.
This stems from a demand vacuum. Southeast Asian transfer orders are winding down, while domestic winter-spring orders have yet to materialize, leaving the market without clear drivers. Uncertainty over potential US Section 301 tariffs on Chinese imports, scheduled for July, keeps traders and mills cautious, with little appetite for restocking.
Notably, Pakistani 8S-21S siro-spun yarn shipments remain robust, underscoring its competitive edge in the low-count segment. This reinforces market reliance on Pakistani yarn, especially as open-end yarn weakens, making siro-spun a viable alternative.
Supply Chain Impact: Shifts in Procurement Strategy
These changes in the import yarn landscape are rippling downstream. For weaving mills, raw material cost control becomes critical. Pakistani yarn's cost advantage suggests higher profit margins in low-end products compared to domestic or Vietnamese yarn. However, risks exist—if supply tightens due to Pakistani policy or currency volatility, mills could face shortages.
Yarn traders must also adapt. A Zhejiang-based trading firm reports that some traders are holding cash, waiting for opportunities to restock Pakistani yarn, anticipating further price declines. This expectation is based on Pakistan's cotton price correction and rupee depreciation, but over-concentration in one source could amplify price volatility.
From a broader perspective, the structural shift in imported yarn may persist. Vietnam and India's capacity expansion is slowing, while Pakistan gains market share through cost and geographic advantages. For China's textile industry, this offers diversification but requires assessing long-term supply stability.