The off-season effect in the cotton textile industry is deepening. According to the latest survey data from the China Cotton Textile Association, since July, cotton prices have experienced a roller-coaster of first rising then falling, polyester staple fiber prices have continued to decline amid falling crude oil, while viscose staple fiber has bucked the trend. This sharp divergence at the raw material end, combined with persistently weak end-demand, has left cotton textile enterprises generally struggling with slower shipments and reduced orders. Finished goods inventories continue to accumulate, putting increasing pressure on operations. A round of destocking pain is spreading across the industry.
Raw Material Markets: Price Games Under Triple Divergence
The cotton market has shown a dramatic trajectory recently. Boosted by macro factors such as the US-Iran agreement, external cotton prices once drove domestic Zheng cotton futures to 16,140 yuan per ton. However, as macro sentiment was fully priced in, speculative enthusiasm quickly cooled. Coupled with the traditional off-season in the downstream cotton yarn market, industrial fundamentals lacked driving force, and Zheng cotton futures fell back to 15,615 yuan per ton. This surge-and-retreat pattern essentially reflects a mismatch between macro sentiment and industrial fundamentals. For textile enterprises, this means significantly increased risk in the timing of raw material purchases.
Unlike cotton's volatile swings, the decline in polyester staple fiber follows a clearer logic. With the Strait of Hormuz shipping volume recovering to nearly 60% of pre-war levels, oil prices fell sharply, and the geopolitical risk premium was almost completely erased. After the cost-side risk premium was squeezed out, the polyester chain began a catch-up decline, with staple fiber futures falling to around 6,900 yuan per ton. For enterprises focusing on polyester yarn, while lower raw material costs help, yarn prices fall faster, further compressing profit margins.
The viscose staple fiber market presents a different picture. Factory rebate concessions have been reduced, traders have raised prices amid supply tightness, and the tight shipment situation is unlikely to ease in the short term. However, downstream yarn sales remain under pressure. This upstream-tight, downstream-weak pattern suggests that viscose fiber prices will likely remain range-bound in the future, with no unilateral upward trend.
Yarn and Fabric: All Categories Under Pressure, Destocking Becomes the Theme
The yarn market is under pressure across almost all categories. Cotton yarn continues its off-season pattern, with nominal prices stable but actual transaction prices low due to widespread trade concessions. Finished goods inventories are slowly accumulating, downstream weaving operating rates are declining, gray fabric inventories are high, and autumn/winter orders have yet to pick up. Enterprises generally maintain a cautious outlook.
Sub-categories such as vortex-spun yarn, colored spun yarn, and differential yarn are also under pressure. Vortex-spun viscose yarn and polyester-viscose yarn have weak volume and prices, with enterprises mainly producing small orders. For colored spun yarn, destocking pressure is high for conventional varieties, with only high-count differentiated products showing relatively stable demand. Differential yarn, despite full operating rates, suffers from poor order continuity, severe price competition, and shrinking profits. Polyester yarn, dragged down by falling raw materials, has yet to stabilize in price, with the market in a wait-and-see mode.
On the fabric side, the off-season continues for full-cotton gray fabric, with slower shipments and rising inventory. The yarn-dyed fabric market is also slowing, with raw cotton prices down about 300 yuan per ton and high-count cotton yarn prices down about 180 yuan per ton. However, downstream demand is weak, with most enterprises buying only as needed. Fabric prices have loosened in some areas, leaving thin profit margins. The denim market is sluggish both domestically and internationally, with order volumes shrinking, factory operating rates declining, and enterprises accelerating destocking.
Industrial Impact: Profit Squeeze and Market Divergence Intensify
The cotton textile industry is undergoing a deep destocking pain. Increased volatility in upstream raw material prices, combined with persistently weak downstream demand, has created a price scissors that directly squeezes margins in the intermediate processing stage. For spinning enterprises focused on conventional varieties, product homogeneity is severe, price competition is fierce, and profits are thin or even negative. For enterprises with differentiated product capabilities, such as high-count colored spun yarn or specialized yarns, orders are relatively stable but still face price competition and poor order continuity.
From a regional perspective, traditional textile clusters such as Keqiao and Shengze are seeing declining weaving operating rates and rising gray fabric inventory pressure. The Nantong home textile market is also feeling the chill of weakening end-demand. This full-chain pressure suggests the destocking cycle may last longer than expected.