The cotton textile industry is undergoing a painful period of deepening off-season destocking. According to the latest survey by the China Cotton Textile Association, cotton prices briefly surged on macro sentiment but quickly retreated, polyester staple fiber continued to decline as raw material risk premiums unwound, while viscose staple fiber rose against the trend due to tight supply. Yarn and fabric markets are facing triple pressures of shrinking orders, rising inventories, and narrowing margins.
Raw Material Divergence: Cotton Range-Bound, Polyester Under Pressure, Viscose Tight
Cotton prices recently experienced a rise followed by a fall. The US-Iran agreement boosted global financial markets, pushing external cotton prices up and driving domestic Zheng cotton futures to a high of 16,140 yuan/ton. However, after the macro sentiment was fully priced in, speculative enthusiasm cooled, and with downstream cotton yarn still in its traditional off-season, the market lacked fundamental drivers. Zheng cotton futures retreated to 15,615 yuan/ton. Overall, cotton prices are caught in a range, likely to continue fluctuating in the near term. This means textile mills need more flexible raw material procurement strategies and should avoid chasing price spikes.
Polyester staple fiber markets were hit hard by raw material volatility. The Strait of Hormuz shipping volume recovered to nearly 60% of pre-conflict levels, oil prices fell sharply, and almost all geopolitical risk premiums were unwound. After cost-side risk was squeezed out, the polyester chain began a catch-down correction, with short-fiber futures falling to around 6,900 yuan/ton. Whether lower prices trigger restocking demand will be a key short-term focus. For polyester-blend yarn mills, lower raw material costs offer margin relief but also deepen downstream wait-and-see sentiment.
Viscose staple fiber is the only 'tight' raw material at present. Factory rebate incentives have been reduced, traders have raised prices due to supply constraints, and tight delivery conditions are expected to persist. Although downstream yarn sales face pressure, supply-side constraints support prices, and viscose is likely to remain broadly stable. This means viscose yarn mills must balance high raw material costs against weak end-user demand.
Yarn Markets Under Broad Pressure: Destocking Becomes the Theme
Pure cotton yarn markets continue the off-season pattern, with prices broadly stable but traders offering widespread discounts, keeping actual transaction prices low. Mill finished goods inventories are still slowly accumulating, downstream weaving operating rates are declining, grey fabric inventories are building, and autumn/winter orders have yet to materialize. Mills remain cautious about future markets. This suggests the 'price floor' for pure cotton yarn has not yet been confirmed, and buyers should avoid large stockpiles.
Vortex-spun yarn markets are weak in both volume and price, with vortex-spun viscose and polyester-viscose yarns seeing slower trading, and mills relying on small orders to maintain balance. Colored spun yarn markets have a strong off-season feel, with high-count differentiated varieties relatively stable but conventional varieties under heavy destocking pressure due to a lack of terminal orders. Differentiated yarn mills are running at full capacity but face poor order continuity, with new orders mainly small and scattered, leading to severe price competition and further margin compression.
Polyester yarn markets are hit by both falling raw materials and the off-season, with prices following raw material declines and spot trading further cooling. Mills have insufficient orders, mainly small and scattered, and product inventories are under pressure. Viscose yarn shows a divergence of rising raw material costs and falling yarn prices, with slow transaction speeds and downstream buyers only purchasing for immediate needs. Overall, destocking has become a consensus across the yarn market, with mills generally reducing operating rates or cutting production to cope with shrinking demand.
Fabric Markets: Off-Season Deepens, Weaving Mills Under Pressure
Full cotton grey fabric markets are stable but weak, with slower shipments, orders mainly for small-batch quick-replenishment, and few new orders. Finished goods inventories are accumulating, increasing operational pressure on weaving mills. Raw material purchases are generally on a need-to-buy basis, with no willingness to build stocks. Yarn-dyed fabric markets are also slowing, with normal machine operation but weak new orders. Raw cotton prices have fallen by about 300 yuan/ton, making it difficult to support cotton yarn prices, with high-count pure cotton yarn prices down about 180 yuan/ton. Fabric product prices are showing some flexibility, but margins are razor-thin.
Denim fabric markets are quiet in both domestic and export channels. Orders are shrinking, factory operating rates are declining, and finished goods are not selling smoothly. All companies are accelerating destocking, highlighting the overall market pressure. Combined with the strengthening US dollar index and uncertain export environments, industry players are closely monitoring export trends and assessing future market directions.