Jiangsu Staple Fiber Spot Rises 35 Yuan, Early Signal of Market Bottom

Jiangsu polyester staple fiber spot prices rebounded 35 yuan per ton on July 7, settling at 7,185 yuan/ton. The negotiation range was concentrated between 7,130 and 7,200 yuan/ton, with high offers reaching 7,300 yuan/ton and low offers as low as 6,950 yuan/ton. While this increase appears modest, it may signal a short-term market bottom after several weeks of continuous declines.

Industrial Logic Behind the Rebound

The immediate driver comes from upstream raw materials. PTA and ethylene glycol prices have stabilized in recent days, providing cost support for staple fiber. More importantly, downstream weaving enterprises, after a period of destocking, have reduced raw material inventory to low levels, prompting some to begin restocking. This dual effect of cost push and restocking demand first emerged in Jiangsu, a major staple fiber producing region.

However, caution is warranted. End-use textile and apparel orders have not shown substantial recovery. Feedback from fabric markets in Shengze and Keqiao indicates that grey fabric and finished fabric turnover remains slow, with weaving mill operating rates hovering around 60%, down about 10 percentage points year-on-year. This suggests the rebound is more of a mid-chain repair than a trend reversal driven by end demand.

Signal from Price Range Divergence

The current quotation range spans 350 yuan/ton, from 6,950 to 7,300 yuan/ton, reflecting sharply divergent expectations among market participants. Low-end offers come mainly from small and medium traders eager to liquidate inventory, while high-end offers come from leading enterprises with raw material cost advantages, who prefer to hold prices firm.

This divergence presents a double-edged sword for buyers: low-end offers provide short-term bargain opportunities, but if market expectations fail to converge, prices may retest lower levels. Historical experience shows that when the negotiation range exceeds 300 yuan/ton, the market is often at a critical point of directional choice.

Transmission Effects Along the Supply Chain

The price increase will first transmit to the yarn sector. Open-end and ring-spinning mills in Jiangsu and Zhejiang typically adopt a "buy-as-needed" strategy with raw material inventory cycles of 7-10 days. If staple fiber prices continue to rise, it will directly increase cotton yarn production costs, squeezing mill profit margins.

For downstream fabric enterprises, the impact of staple fiber price hikes has a lag. Grey fabric prices remain low, making it difficult for fabric suppliers to fully pass on raw material cost increases to apparel brands. Over the next two weeks, polyester-cotton blended fabric prices may inch up slightly, but by no more than 2%-3%.

Practical Recommendations

For Buyers - Increase procurement volumes moderately in the short term, locking in low-end supply at 6,950-7,130 yuan/ton, but keep single purchase cycles under 15 days to avoid inventory devaluation risk - Monitor PTA futures; if the main contract breaks below 4,800 yuan/ton, staple fiber prices may fall back below 7,000 yuan/ton, creating a better entry point - Negotiate floating price agreements with suppliers, linking prices to raw material indices to reduce single-direction betting risk

For Mills - Spinning mills can extend raw material inventory cycles to 15-20 days, locking in costs at current favorable levels - Grey fabric and finished fabric enterprises should accelerate finished goods sales to prevent profit erosion from inventory depreciation after raw material price increases - Monitor staple fiber plant operating rates in Jiangsu; if rates fall below 70%, supply-side contraction is underway, providing stronger price support