The price of cotton yarn 32S has reached its highest level in nearly a year. On July 10, the industry benchmark settled at 24,875 yuan per ton, representing a cumulative increase of 7.3% from the year's low of 23,175 yuan per ton in early 2026. This rise is not merely a pass-through of raw material costs but reflects a broader redistribution of profit margins across the textile supply chain—from upstream cotton to downstream apparel.
Price Dynamics: Low Inventory and High-Level Bargaining
At 24,875 yuan per ton, the current price is not only the highest in the past year but also a rare high in the past two years. The annual average price stands at 23,814.82 yuan per ton, meaning the current level is about 4.5% above the mean. For weaving mills that sourced yarn at lower prices earlier, replenishing inventory now would mean a significant cost increase.
The upward trajectory has been gradual rather than volatile, indicating a tight supply-demand balance. On the supply side, high cotton prices provide cost support, while yarn mills operate with low inventory, strengthening their pricing power. Industry data shows that operating rates in the textile sector remained elevated in the first half of 2026, but new capacity additions, especially for high-count yarns, have been limited, reducing supply elasticity.
Supply Chain Impact: Squeezed Weaving Margins and Shrinking Procurement Windows
Cotton yarn 32S is widely used in weaving plain and twill fabrics as well as knitted products. At current prices, gray fabric mills face direct margin compression. If fabric selling prices fail to adjust upward in tandem, weavers could see their per-ton gross profit shrink by 300-500 yuan.
For export-oriented weavers, the situation is more challenging. Overseas orders are typically priced 2-3 months in advance. If the yarn cost embedded in those orders is lower than the current spot price, the profit margins on in-hand orders are being eroded. Some mills may delay replenishment or switch to lower-cost rotor-spun yarn, but the latter differs in quality and application, making full substitution difficult.
On the apparel procurement side, high yarn prices are compressing the cost buffers of brands, especially fast-fashion and mass-market players that are highly sensitive to fabric costs. If cotton yarn prices remain elevated through the third quarter, the cost of sourcing autumn/winter fabrics will be significantly higher than last year. This may force brands to raise prices in late 2026 or spring 2027, or adjust fabric compositions to increase the share of polyester blends.
Regional Responses: Divergence Between Keqiao and Nantong
In key textile clusters, reactions to high yarn prices vary. In Keqiao, Shaoxing—the largest fabric trading hub—gray fabric turnover has slowed, and traders are adopting a wait-and-see approach. Inquiries are up, but actual orders are down, as price negotiations enter a stalemate.
In Nantong's home textile cluster, the impact is more muted. Home textile products typically use coarser yarn counts and carry higher added value, making them less sensitive to raw material price swings. However, if yarn prices persist at high levels, cost pressure will eventually build, especially during e-commerce promotions when margins on low-price items are already thin.