The traditional off-season for the cotton textile industry is deepening from a 'moderate adjustment' into a period of intense pain. According to the latest survey data from the China Cotton Textile Association, the price transmission mechanism between raw materials and finished products is broken, with inventory pressure spreading from yarn to fabric sectors. The entire chain is undergoing a new round of 'destocking' pain.
Raw Material Divergence: Cotton Volatility, Polyester Pressure, Viscose Tightness
Cotton prices have experienced a 'rise-then-fall' cycle. Boosted by macro factors like the US-Iran agreement, the Zhengzhou Cotton futures peaked at 16,140 yuan/ton, but quickly retreated to around 15,615 yuan/ton as market sentiment cooled and downstream demand weakened. This 'stuck in the middle' pattern means high-cost inventory positions could be risky. Polyester staple fiber faces a tougher situation. With the Strait of Hormuz shipping recovering to 60% of pre-war levels, oil prices have dropped sharply, dragging the polyester chain down. Short-fiber futures have fallen to around 6,900 yuan/ton. The 'risk premium unwind' is squeezing profit margins for polyester yarn makers. Viscose staple fiber, however, shows a different trend. Factory shipments are tight, and traders are raising prices. But downstream viscose yarn sales remain weak, creating a 'raw material up, finished product down' scissors gap that erodes yarn makers' profits.
Yarn Market: Fragmented Orders, Rising Inventory Pressure
Survey data shows the off-season has shifted from 'slowing shipments' to 'order fragmentation.' Pure cotton yarn traders are offering discounts, keeping transaction prices low. Vortex-spun yarn sees both volume and price declines, with factories relying on small orders to maintain balance. Colored spun yarn faces destocking pressure on regular items, while high-count differentiated products remain relatively stable. Differentiated yarn makers operating at full capacity seem optimistic, but hidden risks are emerging. Although order lead times are around one month, new orders are small and scattered, with poor continuity. More critically, the off-season combined with 'price involution' is further squeezing profits. Polyester-containing yarn prices have not yet stabilized, with strong wait-and-see sentiment. Prices follow raw material declines, downstream buyers only purchase for immediate needs, and inventory is rising. Viscose yarn faces a 'raw material up, yarn down' dilemma, with slow sales and a likely flat outlook.
Fabric Market: Greige Goods Inventory Accelerates, Export Uncertainty Rises
Pressure on the fabric side is more direct than on the yarn side. Pure cotton greige fabric shipments have clearly slowed, with orders limited to small, quick-turnaround batches. New orders are scarce, and finished goods inventory is accumulating. Weaving mills have fully shifted to a 'buy-as-needed' procurement strategy, with extremely low stockpiling willingness, which in turn worsens upstream yarn sales. The yarn-dyed fabric market is also slowing. Raw cotton prices have fallen by about 300 yuan/ton, and high-count pure cotton yarn prices have dropped by about 180 yuan/ton. Weak downstream demand is forcing fabric prices to soften locally, leaving very thin profit margins. The denim market faces dual pressure: domestic orders are shrinking, while exports face uncertainty from a strengthening US dollar. Companies are accelerating destocking, with lower operating rates.