The benchmark price of cotton yarn 32S hit 24,875 yuan/ton on July 9, 2026, marking the highest level in two years. Over the past year, the price fluctuated between 23,175 and 24,875 yuan/ton, with the current price at the top of the range, up about 7.3% from the year's low. This price surge is not an isolated event but a combined result of cost transmission, tight supply, and downstream demand dynamics.
Supply-Demand Dynamics Behind the High Price
On the cost side, cotton prices have been rising steadily since the second half of 2025, directly pushing up yarn production costs. Although the price of cotton yarn 32S did not increase on July 9, the cumulative gain since the beginning of the year reached 0.61%, and the price remains in a high-level zone. Notably, the current price equals the historical high, but the annual average is only 23,810 yuan/ton, indicating that most of the past year saw lower prices, and cost pressures have not been fully passed through to end users.
On the supply side, mill operating rates diverged at the end of Q2. High temperatures and power rationing in some regions led small and medium-sized mills to reduce capacity, tightening spot market availability. Meanwhile, imported cotton yarn arrivals fell month-on-month in June, further reinforcing supply tightness. These factors collectively supported the high price of cotton yarn 32S.
Downstream Weaving and Apparel Companies Under Pressure
Sustained high prices for cotton yarn 32S directly impact downstream weaving mills. For example, 32-count yarn is widely used in conventional fabrics, and if mills cannot pass cost increases to apparel brands, their profit margins will be severely squeezed. Industry feedback indicates that some small and medium-sized weaving mills have begun reducing purchases of 32-count cotton yarn, shifting to polyester-cotton blends or viscose yarns as substitutes, which dampens demand elasticity for pure cotton yarn.
For apparel export companies, the current price environment means higher order risks. Overseas customers generally have low acceptance of price increases, while RMB exchange rate fluctuations add to pricing difficulties. If cotton yarn prices remain high through Q3, export orders may face delays or volume reductions. Textile Circle believes that this cost transmission bottleneck may force a structural adjustment along the supply chain.
How Long Can the High Price Last?
Historical data shows that between July 2025 and July 2026, the price of cotton yarn 32S experienced several spikes, but each high lasted less than a month. The current price has hit a two-year peak, and upward momentum is weakening. On one hand, the expectation of new cotton harvests in September will gradually improve supply; on the other, if downstream mill operating rates continue to decline, demand for cotton yarn will drop.
However, a sharp price drop is unlikely in the short term. Cotton mills generally hold low raw material inventories, and restocking demand persists. Meanwhile, if state reserve cotton auctions are not promptly implemented, the market may remain in a tight balance. Overall, cotton yarn 32S prices are likely to fluctuate in the 24,500-25,000 yuan/ton range from late July to August, and breaking through 25,000 yuan would require new bullish catalysts.