The benchmark price of cotton yarn 21S settled at 23,466.67 yuan per ton on July 9, 2026, matching the one-year high and representing a cumulative increase of over 7% from July 2025. The price now sits at the top of the annual range, with a spread of 1,700 yuan per ton from the low of 21,766.67 yuan per ton. Daily change is zero, indicating a plateau rather than acceleration.
The primary driver for this price rise is upstream cotton costs. Global cotton production estimates for the 2025/2026 season were revised downward, and domestic cotton commercial inventories continue to deplete, pushing up the cotton price center. Spinning mills are forced to raise yarn prices, but downstream weaving and apparel companies are not fully accepting the hikes.
Weaving mill operating rates have declined in the traditional off-season of July, with small and medium-sized mills in Jiangsu and Zhejiang reporting insufficient new orders. Brand owners are slowing down autumn/winter order placements, preferring to 'sell before buy' to avoid inventory build-up. Cotton yarn trader inventories remain low, with limited restocking appetite.
This pattern of 'cost-push, demand-drag' means that while cotton yarn prices are high, transaction volumes are not expanding. Industry profits are squeezed in the midstream spinning sector, while downstream margins are nearly eliminated.
Regional industrial clusters show divergent responses. In major cotton yarn producing areas like Shandong, Henan, and Jiangsu, large-scale mills are adjusting product mixes to increase high-count and blended yarn ratios to absorb cost pressure. Small mills in Henan, with weaker bargaining power, are forced to accept lower processing fees.
In the consumption end, the Nantong home textile cluster reports a shift to 'small lot, multiple batch' purchasing patterns. Guangdong knitted fabric markets see rigid demand for 21S yarn but with compressed negotiation space of only 100-200 yuan per ton.
High cotton yarn prices are accelerating substitution effects. Polyester staple fiber and viscose staple fiber are gaining cost advantages, prompting some weavers to increase chemical fiber usage. China Customs data shows a 5% year-on-year decline in cotton yarn imports in H1 2026, while chemical fiber yarn imports rose.
Meanwhile, Vietnamese and Indian cotton yarn prices are re-emerging as competitive, despite high international cotton prices. Their lower processing costs put pressure on domestic yarn. Foreign trade enterprises should monitor import yarn arrival schedules to avoid passive inventory accumulation.