Cotton prices experienced a brief rally driven by macro sentiment, then quickly retreated, with the main contract falling from a high of 16,140 yuan/ton to 15,615 yuan/ton, a swing of over 3%. This reflects the dual pressure of weak demand in the traditional off-season for cotton yarn and the fading of speculative fervor. Meanwhile, polyester staple fiber prices plummeted to around 6,900 yuan/ton following a sharp decline in raw material costs, as the resumption of navigation in the Strait of Hormuz eliminated geopolitical premiums. In contrast, viscose staple fiber followed an independent trajectory, with tight factory supply and traders raising prices, leading to a stable but upward trend. This significant divergence in raw materials means downstream spinning mills face a more complex procurement landscape: cotton spinners must navigate price volatility, while polyester-blend yarn producers bear the pressure of finished goods prices following raw material cost collapses.
Yarn Market: Slow Inventory Build, Deteriorating Order Structure
The pure cotton yarn market saw stable quoted prices, but traders widely offered discounts, keeping actual transaction prices low. Finished goods inventories are slowly accumulating, with downstream weaving operating rates declining and grey fabric inventories high. Autumn/winter orders have yet to materialize. Vortex spun yarn showed weak volume and prices, barely balancing production and sales, with mills operating on small orders. Colored spun yarn faced significant destocking pressure for regular varieties, while high-count differentiated products remained relatively stable, but overall orders were scarce and sentiment cautious. Differentiated yarn mills maintained full capacity, but order continuity was poor, with new orders mainly small and sporadic. Intense price competition further squeezed profits. Polyester-blend yarns saw prices fall along with raw material declines and have yet to stabilize, with downstream purchasing only for immediate needs, leading to underfilled orders and mounting inventory pressure. Viscose yarn prices weakened despite stable-to-rising raw material costs, with slow transactions, and the market is expected to remain stable.
Fabric Market: Off-Season Spreads Broadly, Export Uncertainty Rises
The grey fabric market saw slower shipments, few new orders, and rising finished goods inventories. Weaving mills purchased raw materials on an as-needed basis with minimal stockpiling. The yarn-dyed fabric market slowed overall, with raw cotton prices dropping by about 300 yuan/ton and high-count pure cotton yarn prices falling by around 180 yuan/ton. Fabric product prices saw localized easing, leaving razor-thin margins. The denim sector faced a sluggish market both domestically and for exports, with reduced downstream orders, lower mill operating rates, and a push to destock. Notably, the continued strengthening of the US dollar has added uncertainty to the export environment, with industry players closely monitoring export trends. This indicates that beyond weak domestic demand, external exchange rate fluctuations are compounding operational risks for enterprises.