Shandong Cotton Yarn Prices Diverge: Gap Between 21S and 32S Widens, High-Count Yarn Under Pressure

Shandong's cotton yarn market flashed a warning signal in mid-July: the price gap between 21S and 32S ring-spun knitting yarn is widening, with high-count yarn under noticeably more pressure than low-count varieties. This structural divergence likely signals a shift in downstream weaving preferences.

Based on public quotations from July 10, 21S high-grade knitting yarn ranged from 22,800 to 24,400 yuan/ton, a spread of 1,600 yuan across different mills; 32S ranged from 24,500 to 26,400 yuan/ton, a spread of nearly 1,900 yuan. Guanxing Textile priced 21S at 22,800 yuan/ton and 32S at 24,500 yuan/ton, a gap of only 1,700 yuan; while Shandong Hongyang Chemical's 32S at 26,400 yuan/ton created a 3,600 yuan gap versus Guanxing's 21S. This high dispersion indicates the market lacks a clear pricing anchor.

The Logic Behind Price Divergence

The core driver is structural change in demand. 21S is a staple for basic knitwear like T-shirts and underwear, with relatively rigid demand. 32S is used more in mid-to-high-end knitted fabrics and some woven products, where orders are more volatile. Recently, apparel brands have adopted a 'cost-reduction, frequency-increase' strategy, substituting 21S or 26S for 32S, directly compressing order elasticity for the higher count.

Among Shandong mills, Guanxing Textile offered the lowest prices for both specs, indicating stronger destocking urgency. Weifang Guanjie, Jinyi Yarn, and Runfengda quoted 21S at 23,200-24,400 yuan/ton and 32S at 24,800-25,400 yuan/ton, 3%-5% higher than Guanxing. These differences partly reflect raw material costs and partly differences in financial pressure and customer mix.

Practical Implications for Buyers and Mills

For weavers and traders, the current pricing landscape suggests two things: first, 21S offers relatively transparent bargaining room, suitable for long-term contracts to lock in costs; second, 32S faces further downside risk and should not be stockpiled in large volumes. As Shandong is one of China's most concentrated cotton yarn production regions, its pricing trends often influence Henan and Jiangsu markets.

Notably, Shandong Hongyang Chemical's 32S quote at 26,400 yuan/ton significantly exceeds peers, possibly because the company is primarily a chemical producer—its pricing logic may not reflect true supply-demand dynamics. Buyers should prioritize quotes from professional spinners.

Outlook

In the near term, 21S prices have solid support at 22,800-23,200 yuan/ton, given rigid cotton costs and low-capacity utilization (around 70%) for low-count yarn, limiting supply surges. 32S faces two headwinds: first, imported yarn (especially Vietnamese and Indian 32S) arrives at 24,000-25,000 yuan/ton, undercutting domestic yarn; second, downstream gray fabric inventories are accumulating, dampening mill restocking. We expect 32S mainstream transaction prices to dip to 24,500 yuan/ton over the next two weeks.

For Buyers - For 21S, consider signing monthly framework agreements with low-quote mills like Guanxing to lock in a base price of 22,800-23,200 yuan/ton. - For 32S, stick to weekly small-lot purchases; avoid long-term contracts until prices stabilize. - Monitor quotes from non-core spinners like Shandong Hongyang Chemical—their volatility makes them unreliable as pricing benchmarks.

For Mills - Moderately reduce 32S capacity utilization and shift production toward 21S or 26S to cut high-count yarn inventory. - Differentiate pricing: maintain small discounts for long-standing customers, but stick to market pricing for new clients to avoid being locked into low-margin orders. - Strengthen linkage between cotton procurement and yarn sales. Current 3128B-grade spot cotton is around 16,300 yuan/ton; if cotton prices decline further, cost support for yarn will weaken—prepare hedging plans in advance.