In May 2026, China's cotton textile industry sentiment index fell to 49.9%, down 0.1 percentage point from April, marking its first drop below the 50% threshold since August last year. This signals the official onset of the traditional off-season, with expansion momentum fading.
Raw Material Market: Price Divergence and Procurement Slowdown
The raw material procurement index stood at 50.2% in May, still above the boom-bust line but down sharply by 2.5 percentage points month-on-month, indicating a clear contraction in mills' restocking appetite. The average spot price of Grade 3128 cotton reached 17,373 yuan per ton, up 504 yuan from April, but the futures market told a different story: after hitting a year-high of 16,955 yuan per ton on the first day after Labor Day, the main contract slid to 15,855 yuan before stabilizing at month-end. This 'peak-then-decline' pattern reflects market digestion of earlier elevated prices.
For non-cotton fibers, polyester staple fiber prices dropped 1.83% month-on-month to 8,027 yuan per ton, dragged by volatile international oil prices. Viscose staple fiber bucked the trend, rising 2.37% to 14,035 yuan per ton, with mills raising quotes slightly. However, downstream buyers, holding ample inventories, did not increase volumes significantly.
Procurement volumes diverged: the cotton procurement sub-index fell sharply to 47.3%, down 6.5 percentage points, as mills adopted a cautious stance toward future cotton prices and actively destocked. In contrast, the non-cotton fiber procurement index remained flat at 50.0%, indicating stable buying of synthetic alternatives.
Production and Sales: Output Edges Up, Inventories Build
The production index in May was 50.3%, up 0.9 percentage points from April. Both yarn and fabric output indices exceeded the threshold, at 50.1% and 51.4% respectively. However, the equipment utilization rate index was only 49.5%, still below 50%, suggesting that overall capacity utilization did not keep pace—some mills may be relying on overtime or product mix adjustments to maintain output.
The product sales index reached 50.2%, up 2.5 percentage points, but this growth was driven by price hikes rather than volume. The average price of 32-count pure cotton carded yarn rose 4.62% to 23,739 yuan per ton, while pure cotton grey fabric (C 32*32 130*70 63" 2/1 air-jet) jumped 7.35% to 7.43 yuan per meter. Yet, both yarn and fabric sales volume indices fell below 50%, at 47.7% and 48.8% respectively, indicating downstream buyers are only purchasing on a need-to basis and resisting higher prices.
This 'price up, volume down' dynamic directly inflated inventories: the product inventory index dropped to 48.0%, down 3.2 percentage points, signaling rising stock levels. Yarn and fabric inventory indices were 48.7% and 46.8%, both below 50%, with fabric inventory pressure more acute.
Business Confidence: Marginal Improvement, But Off-Season Outlook Persists
The business operation index held steady at 50.0%. While the revenue sub-index was a weak 49.3%, the profit sub-index came in at 50.7%—above the threshold. This suggests that mills are still benefiting from low-cost raw materials purchased earlier, allowing them to capture margins amid price increases. However, the revenue weakness confirms that end-user demand has not genuinely recovered.
Business confidence improved to 49.4%, up 2.7 percentage points from April, but remained below the boom-bust line. The industry widely expects the off-season to continue, with orders slowing and sales momentum softening.