The price of cotton yarn 32S is knocking on the door of a one-year high. As of July 10, the benchmark price reached 24,875 yuan per ton, a year-on-year increase of 1,700 yuan or over 7%. However, the daily change was zero, signaling a loss of upward momentum in the market.
Price Trajectory: From Trough to Peak in a Complete Cycle
Looking back over the past year, the lowest point for cotton yarn 32S appeared on July 10, 2025, at 23,175 yuan per ton. Prices then climbed steadily, hitting the annual peak of 24,875 yuan per ton on July 10, 2026, with an amplitude of 7.3%. In quarterly terms, the average price was around 24,000 yuan per ton in Q1 2026, moving up to 24,500 yuan per ton in Q2, and further strengthening into July.
Notably, the current price is at the top of the annual range, meaning there is zero gap from the peak. This is uncommon for cotton yarn and typically signals two possibilities: either a breakout to new highs or a pullback due to resistance.
Stalemate at Highs: The Tipping Point of Supply-Demand Game
The main driver behind the high prices is upstream supply. Global cotton production estimates for the 2025/2026 season were revised down, and China's domestic cotton commercial inventories are at relatively low levels for recent years. This has pushed up spot cotton prices, forcing spinning mills to pass on costs.
But downstream absorption is being tested. Weaving mills report that they are mainly purchasing on a need-to-use basis, with little willingness to build inventories. The reason is simple: price pass-through to greige fabrics and finished garments is not smooth, and end brands have limited tolerance for price increases. This 'hot above, cold below' pattern has led to a market characterized by stable prices but shrinking volumes.
From an industry inventory perspective, social stocks of cotton yarn are at moderate-to-high levels, not in shortage. This suggests that current high prices are more cost-push than demand-pull. Once cotton prices soften, the supporting logic for cotton yarn will weaken.
Profit Redistribution: A Brief Window for Spinning Mills
For spinning mills, current high prices mean improved profitability, especially for those that built cotton inventories at lower levels. But how long this window lasts depends on two variables: future cotton price trends and the strength of downstream order recovery.
Foreign trade enterprises face more direct challenges. Fluctuations in the yuan exchange rate, rising ocean freight rates, and high raw material costs are eroding the competitiveness of export orders. Some small and medium-sized traders have started switching to cheaper imported cotton yarn, such as 32S from Vietnam and India, which typically quotes 500-800 yuan per ton lower than domestic supplies.