Shandong Cotton Yarn Prices Diverge: 21S Weakens While 32S Holds Firm, Mills Face Profit Reallocation

The July 10, 2026 price data from Shandong's major cotton yarn production zones reveals a noteworthy signal: the price trends of 21S and 32S ring-spun knitting yarns are decoupling. 21S high-grade cotton yarn has fallen to an average of around 23,400 RMB/ton, while 32S remains firm near 25,200 RMB/ton. The price gap has widened from about 1,200 RMB/ton a month ago to 1,800 RMB/ton, a rare occurrence in the past two years.

Industrial Logic Behind the Divergence

The weakness of 21S cotton yarn is no accident. This specification mainly supplies low-count knitted fabrics used in T-shirts, underwear, and other domestic mass-market garments. This year, China's apparel retail sales have slowed, and low-price competition on e-commerce platforms has squeezed intermediate profits, making downstream weaving mills more conservative in their 21S purchases. Shandong Guanxing Textile reported a low price of 22,800 RMB/ton, about 4% lower than other Weifang-area enterprises, reflecting that mills with high inventory pressure are the first to cut prices to destock.

The resilience of 32S cotton yarn comes from two directions: first, stable demand from export orders for knitted outerwear (such as hoodies and cardigans) for medium-count yarn; second, rigid procurement from the home textile sector (bedding, towels, etc.). Shandong Hongyang Chemical reported a high price of 26,400 RMB/ton, forming a nearly 2,000 RMB/ton range with Guanxing's 24,500 RMB/ton, indicating significant differences in customer structure and order quality among enterprises.

Rising Regional Price Dispersion

Companies like Weifang Jinyi Yarn and Weifang Runfengda Textile reported 21S prices concentrated around 23,200 RMB/ton and 32S at 24,800 RMB/ton, placing them in the mid-range for Shandong. However, the price spread for the same specification can reach 1,600-1,900 RMB/ton between different enterprises, which typically occurs when market expectations diverge. For buyers, this means more room for 'one order, one price' negotiations, but for mills, it adds uncertainty to profit margins.

On the cost side, Xinjiang cotton prices have recently remained in the 16,000-16,500 RMB/ton range, narrowing the cotton-yarn spread to 7,000-7,500 RMB/ton, a historically low-to-mid level. This suggests that spinning margins have been compressed to near breakeven. The room for 21S price cuts comes mainly from mills voluntarily reducing profits, not from lower raw material costs.

Industry Impact: Accelerated Product Mix Adjustment

This price divergence is pushing Shandong spinning mills to rethink their product lines. 21S capacity is excessive with thin margins, and some mills have begun shifting ring-spinning capacity toward 32S, 40S, or even higher counts. However, conversion is not cost-free—32S requires higher sliver uniformity and twist control, necessitating replacement of some drafting components, and new customer development typically takes 2-3 months.

For downstream weaving and garment companies, the current low-price window for 21S may not last long. Once cotton prices stabilize and rebound, 21S tends to have higher upside elasticity than 32S due to its lower base and larger processing fee share. It is recommended that buyers build safety stock at low 21S levels while locking in forward contracts for 32S to hedge against price increases.

Practical Recommendations

For Buyers - 21S cotton yarn is at a temporary low; consider signing 1-2 month long-term agreements to lock in current prices. However, monitor mill delivery stability, prioritizing companies with ample capacity in the Weifang area. - 32S cotton yarn has a wide price range (24,500-26,400 RMB/ton). Solicit quotes from at least three suppliers and request sample testing for neps and CV% to avoid substandard quality at low prices. - Closely track Xinjiang cotton prices. If cotton breaks above 16,800 RMB/ton, 32S yarn may lead price increases; in that case, consider switching to 21S blended yarn as an alternative.

For Foreign Trade Enterprises - When negotiating export orders for 32S knitted outerwear, use a cotton yarn cost ceiling of 25,000 RMB/ton as a pricing benchmark; any excess should be borne by the customer or reflected in adjusted finished product prices. - For Southeast Asian buyers, current Shandong 21S cotton yarn prices (around $3,200/ton) are about 3%-5% lower than Vietnamese equivalents; try to capture transshipment orders, but verify rules of origin. - Include a cotton yarn price fluctuation clause in export contracts, stipulating that if cotton prices fluctuate more than 5%, both parties will renegotiate the yarn purchase price to hedge raw material risks.