China's cotton textile sentiment index fell to 49.9% in May 2026, down 0.1 percentage points from April, slipping below the boom-bust line for the first time in two months. This data from the National Bureau of Statistics and industry sources reveals that the off-season effect has systematically transmitted from terminal demand to upstream raw materials.
Unlike the same period last year, this decline is not isolated. The global manufacturing PMI remained above 50 for the 10th consecutive month at 52.6%, but China's manufacturing PMI dropped to 50.0% in May, signaling narrowing gaps between domestic and external demand.
Raw Material Side: Cost Center Moves Up, Procurement Intentions Diverge
The raw material procurement index stood at 50.2% in May, still in expansion territory, but fell 2.5 percentage points month-on-month, indicating weakening restocking momentum. Cotton prices hit a new high for the year after the May Day holiday but quickly corrected, with the main contract CF2609 falling from 16,955 yuan/ton to 15,855 yuan/ton. Despite a stabilization trend at month-end, the average spot price still rose 3% month-on-month to 17,373 yuan/ton.
Polyester staple fiber prices declined due to volatile international oil prices, with the monthly average falling from around 8,400 yuan/ton to 8,027 yuan/ton, a 1.83% drop. Viscose staple fiber factories raised quotes slightly, but downstream stocks were ample, preventing a volume surge.
Procurement volumes showed a clear divergence: the cotton procurement index plunged to 47.3%, down 6.5 percentage points from April, while the non-cotton fiber procurement index remained flat at 50.0%. This suggests that mills prefer using relatively stable chemical fiber raw materials during the off-season, adopting a wait-and-see approach toward volatile cotton.
Production Side: Operating Rates Under Pressure, Output Indices Rise Against Trend
The production index came in at 50.3%, up 0.9 percentage points from April, but the equipment utilization rate index was only 49.5%, below the threshold. The yarn output index and fabric output index were 50.1% and 51.4% respectively, both recovering from the previous month.
This means that despite overall underutilization of capacity, delivery needs for existing orders still drove slight output growth. However, output recovery did not translate into improved sales volumes—the yarn sales volume index was only 47.7%, and the fabric sales volume index was 48.8%, both below the threshold.
Sales and Inventory: The Logic of Price-Driven Inventory Reduction Fails
The product sales index in May was 50.2%, up 2.5 percentage points month-on-month, but this increase was largely nominal, driven by price rather than actual transaction volume. The average price of 32s pure cotton combed yarn reached 23,739 yuan/ton, up 4.62% month-on-month, while the average price of pure cotton grey fabric hit 7.43 yuan/meter, up 7.35%.
However, price hikes dampened downstream purchasing intentions. The yarn inventory index fell to 48.7%, and the fabric inventory index dropped to 46.8%, both below the threshold, indicating passive inventory accumulation. This contradicts the traditional logic of "price hikes clearing inventory"—when cost-side increases outpace terminal demand, inventory pressure intensifies.
Business Confidence: Slight Recovery but Still Pessimistic
The business confidence index was 49.4%, up 2.7 percentage points from April but still below 50%. The revenue index was 49.3%, while the profit index was 50.7%.
The profit index exceeding the revenue index reflects that mills benefited from low-cost raw material inventories purchased earlier, achieving temporary profit margins through current high-price sales. However, this advantage is unsustainable—once low-cost stocks are exhausted, newly procured high-priced raw materials will directly compress profits.