The off-season characteristics of the cotton textile market are now fully transmitting from downstream to upstream. The latest industry survey data reveals that inventory pressure across the entire chain—from cotton to yarn, grey fabric, and denim—is intensifying. On the raw material side, cotton prices have shown a volatile pattern of first rising and then falling, with the Zhengzhou Cotton Exchange's main contract fluctuating between 16,140 yuan/ton and 15,615 yuan/ton, lacking sustained upward momentum. Polyester staple fiber has dropped to around 6,900 yuan/ton due to sharp declines in raw material costs, while viscose staple fiber remains a rare bright spot with stable-to-higher prices driven by tight supply.
Inventory Accumulation and Order Contraction Go Hand in Hand
The pressure is most evident in the yarn segment. Pure cotton yarn prices remain stable on the surface, but trade concessions have become the norm, with actual transaction centers staying at low levels. Spinning mills are seeing a slow buildup of finished goods inventories, downstream weaving operating rates are declining, grey fabric stocks are rising, and autumn/winter orders have yet to materialize. Vortex-spun yarn, color-spun yarn, and other categories also face weaker orders and slower shipments, with conventional varieties under the most pressure to destock. Differentiated yarn mills maintain full capacity but rely on small, scattered orders, intensifying price competition and squeezing margins further.
Fabric market performance confirms the sluggishness in end demand. The off-season continues for full-cotton grey fabric, with slower shipments, few new orders, and rising inventories. Mills are purchasing raw materials on a need-to-order basis, showing extremely low restocking willingness. The yarn-dyed fabric market is also slowing, with raw cotton prices down about 300 yuan/ton and high-count pure cotton yarn prices down about 180 yuan/ton. Fabric product prices are loosening locally, leaving razor-thin profit margins. The denim sector faces a cold domestic and export market, with reduced downstream orders, lower factory operating rates, and accelerated destocking, making the overall market pressure prominent.
Raw Material Divergence: Viscose's Tight Balance vs. Polyester's Cost Collapse
The divergence in raw material markets deserves attention. Viscose staple fiber supply remains tight, with factory shipments unlikely to ease in the short term, and trader prices already rising. This provides cost support for downstream viscose yarn. However, viscose yarn prices have not followed suit, instead weakening due to weak demand, with slow transaction speeds and mills only purchasing for immediate needs. This indicates that tight supply at the raw material end has not effectively translated into margin improvement for the yarn segment, as the cost pass-through mechanism is blocked.
Polyester staple fiber faces a completely different situation. The recovery of Strait of Hormuz shipping capacity has led to a retreat of geopolitical premiums, a sharp drop in oil prices, and a correction in the polyester chain. Polyester yarn prices have followed, with blended yarn transactions further weakening. Mills have insufficient orders and rising inventory pressure. Polyester yarn prices have yet to stabilize, and market sentiment is highly wait-and-see.
Foreign Trade and Exchange Rate Risks Compound
The denim survey specifically highlights that a strengthening U.S. dollar index introduces uncertainty for export markets. For export-oriented textile companies, exchange rate fluctuations directly impact order profitability and payment cycles. Against the backdrop of the off-season and destocking, foreign trade firms must simultaneously navigate demand contraction and currency risks, further weakening market confidence.