The latest 127th market survey by the China Cotton Textile Association sends a clear signal: the off-season effect in the cotton textile industry is deepening in June, with inventory pressure and profit shrinkage intensifying simultaneously, though divergence across product categories and regions is quietly emerging.
Raw Material Side: Cost Support Diverges, Range-Bound Trading Dominates
The cotton market recently experienced a roller-coaster ride. News of a US-Iran agreement initially boosted external markets, pushing the Zhengzhou Cotton Futures main contract to 16,140 yuan/ton, but fading macro sentiment and the traditional off-season in the downstream cotton yarn market quickly pulled prices back to around 15,615 yuan/ton. Public data indicates that cotton prices lack clear directional drivers and are expected to trade in a range.
Polyester staple fiber followed a completely different trajectory. As shipping through the Strait of Hormuz recovered to nearly 60% of pre-conflict levels, crude oil prices fell sharply, nearly fully unwinding the geopolitical risk premium. The polyester chain was forced to correct downward, with futures falling to around 6,900 yuan/ton. This sharp cost-side volatility directly suppresses pricing for polyester-containing yarns downstream.
Viscose staple fiber remains the only 'stable' factor on the raw material side. Tight factory shipments and trader mark-ups indicate a phase of tight supply. However, downstream yarn sales are also under pressure, and industry consensus is that prices will remain stable in the near term, with limited upside.
Yarn Side: Order Fragmentation, Inventory Reduction Becomes Common Challenge
The pure cotton yarn market continues its off-season pattern. While mills have not made significant adjustments to listed prices, discount-driven sales at the trading level are common, keeping actual transaction prices low. Finished product inventories are slowly accumulating, downstream weaving operating rates are declining, grey fabric stocks are high, and autumn/winter orders have yet to materialize. Enterprises generally hold a cautious outlook.
Vortex-spun yarn and color-spun yarn also feel the chill. Vortex-spun viscose and polyester-viscose yarns show weak volume and pricing, with transactions relying on negotiated discounts. Most enterprises depend on small orders to maintain production. For color-spun yarn, destocking pressure is prominent for conventional varieties, with only high-count differentiated products showing relatively stable demand, reflecting a shift toward premium and differentiated preferences in end consumption.
Notably, differentiated yarn enterprises maintain full capacity utilization, with order lead times of about one month. However, 'full capacity' does not mean 'high profits'—new orders are predominantly small and scattered, price competition is severe, and profit margins are further compressed. Enterprises express 'cautious optimism' about the future, a phrase that itself hints at underlying concerns about growth uncertainty.
Polyester yarn and viscose yarn face dual pressure from raw materials and demand. Polyester yarn prices follow raw material declines, with trading of polyester-containing yarns weakening further. Enterprises have insufficient orders and rising inventory pressure. Viscose yarn shows a rare divergence of 'raw material up, yarn down,' reflecting extremely limited downstream acceptance of higher prices.
Fabric Side: Operating Rates Decline, Export Uncertainty Increases
The grey fabric market shows clear off-season characteristics. Shipment pace slows, orders are predominantly small-batch quick-response, and enterprises generally purchase raw materials on an as-needed basis with weak stockpiling willingness. Weaving enterprises face rising operational pressure and accelerating finished product inventory buildup.
The yarn-dyed fabric market also slows. 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 forces enterprises to loosen fabric product prices locally, leaving razor-thin profit margins. Enterprises mainly purchase on a just-in-time basis and maintain a cautious outlook.
The denim fabric market faces dual pressure from domestic and export markets. The ex-factory price of 10s pure cotton OE yarn remains range-bound around 14,600 yuan/ton. Downstream orders shrink, mill operating rates decline, and finished product shipments are sluggish. More concerning, the strengthening US dollar increases uncertainty in the export environment, requiring enterprises to closely monitor changes in export policies and exchange rates.