The cotton textile industry is undergoing a structural adjustment driven by the deepening off-season. The latest survey data from the China Cotton Textile Association shows divergent trends among the three major raw materials—cotton, polyester staple fiber, and viscose staple fiber—but the common pressure of shrinking downstream orders and rising inventories is spreading from the yarn sector to the fabric sector, pushing the entire industry chain into a new round of de-stocking.
Raw Material Market Divergence Intensifies, Cost Support Logic Shifts
Cotton prices experienced a volatile rise and fall. Driven by the US-Iran agreement boosting global financial markets, international cotton prices once lifted the Zhengzhou cotton futures main contract to 16,140 yuan/ton. However, as macro sentiment faded and the traditional off-season for the cotton yarn market exerted pressure, prices quickly fell back to around 15,615 yuan/ton. Public industry data indicates that the cotton market currently lacks sustained driving forces, with prices stuck in a dilemma and expected to maintain range-bound fluctuations. This means the procurement window for spinning mills is narrowing, and the strategy of purchasing on demand and just-in-time will become mainstream.
The trend for polyester staple fiber is more severe. With the Strait of Hormuz traffic recovering to nearly 60% of pre-conflict levels, oil prices have fallen sharply, almost entirely reversing the geopolitical premium, and the polyester industry chain has started a catch-up decline. Futures for staple fiber have dropped to around 6,900 yuan/ton. This systematic downward shift in costs is reshaping the pricing benchmark for polyester-containing yarns. For buyers, raw material prices have not yet stabilized, and a wait-and-see sentiment dominates, with restocking actions generally postponed.
Viscose staple fiber is the only raw material currently showing a tight supply situation. Factory rebates and discounts have been reduced, and traders have raised prices due to tight supply. The tight shipment situation is expected to continue in the short term. However, downstream yarn sales pressure remains, making it more likely that viscose fiber prices will stabilize. This 'raw material firm, yarn weak' scissors gap directly compresses the profit margins of viscose yarn enterprises.
Yarn Market: Order Fragmentation, Inventory Pressure Spreads from Cotton to Chemical Fiber
The survey shows that the pure cotton yarn market continues its off-season pattern. Although mill quotations have not seen significant adjustments, discount sales by traders have become common, with actual transaction prices remaining low. Finished product inventories at spinning mills are still slowly accumulating, downstream weaving operating rates are declining, gray fabric inventories are high, and autumn/winter orders have not yet materialized. Companies are generally cautious about the future market outlook.
Specialty yarns and colored spun yarns, among other niche segments, are also under pressure. Although specialty yarn companies maintain full production capacity, new orders are mainly small and scattered, with poor order continuity, and profits are further squeezed by price competition. For colored spun yarns, regular varieties face high de-stocking pressure, with only high-count differentiated products showing relatively stable demand. Vortex spun yarns are weak in both volume and price, barely balancing production and sales.
Polyester-containing yarns are the most affected by the decline in raw material prices. After the US-Iran agreement, polyester staple fiber fell sharply, and yarn prices followed. Downstream procurement is mainly for immediate needs, with orders not fully booked, and product inventories are under further pressure. Viscose yarn shows a divergence of 'rising raw materials, falling yarn prices,' with slow transaction speeds. Mill operating rates and inventory levels remain unchanged from previous periods, and the market is expected to remain stable in the future.
Fabric Sector: Off-Season Effects Fully Manifest, Export Uncertainty Increases
The off-season continues for the gray cloth market, with shipments slowing, few new orders, rising finished product inventories, and increasing operational pressure on weaving enterprises. Raw material procurement is generally on a need-to basis, with low willingness to build inventories. The yarn-dyed fabric market is also slowing, with orders mainly small, and cotton yarn prices facing greater difficulty in holding firm—high-count pure cotton yarn prices have already fallen by about 180 yuan/ton. Fabric product prices are partially loosening, with thin profit margins.
The pressure in the denim market is more pronounced. In late June, the ex-factory price of 10-count pure cotton OE yarn for denim remained narrowly fluctuating around 14,600 yuan/ton. However, both domestic and export markets are quiet, with shrinking downstream orders, declining mill operating rates, and sluggish product shipments. Companies are accelerating de-stocking, and overall market pressure is prominent. More notably, the strengthening US dollar index is increasing uncertainties in the foreign trade environment. Industry players are closely tracking export trends while simultaneously assessing the future market direction.