The cotton textile industry is undergoing a typical off-season destocking cycle. According to the latest survey data from the China Cotton Textile Association, cotton prices briefly surged before retreating, with the Zhengzhou Cotton Futures main contract falling from 16,140 yuan/ton to 15,615 yuan/ton. Polyester staple fiber futures dropped to around 6,900 yuan/ton due to declining raw material costs, while viscose staple fiber prices rose steadily amid tight supply. This divergence in raw materials is transmitting downstream to yarn and fabric sectors, leading to widespread order shortages and inventory buildup.
Raw Material Markets: Geopolitical Sentiment Fades, Cost Support Diverges
The volatility in cotton was primarily driven by macro sentiment. After a US-Iran agreement boosted external cotton prices, domestic futures rose to 16,140 yuan/ton, but speculative enthusiasm quickly faded. The market refocused on fundamentals—cotton yarn remains in the traditional off-season, lacking industrial drivers, and prices retreated to 15,615 yuan/ton. Public data shows cotton prices are now range-bound, meaning textile mills will adopt cautious procurement strategies, likely sticking to just-in-time buying.
Polyester staple fiber's decline stems from cost-side shocks. Strait of Hormuz shipping traffic has recovered to nearly 60% of pre-conflict levels, oil prices have fallen sharply, and geopolitical premiums have been fully erased, triggering a correction in the polyester chain. Futures fell to around 6,900 yuan/ton, pressuring downstream polyester-blended yarns. In contrast, viscose staple fiber remains tight: factory rebates have been reduced, traders are raising prices due to supply constraints, and tight shipments are expected to continue short-term. This 'internal divergence'—weak cotton and polyester versus strong viscose—means yarn makers of different fiber types face distinct cost environments and pricing power.
Yarn Markets: Volume and Prices Weaken, Inventory Pressure Accelerates Downstream
Pure cotton yarn continues its off-season pattern. Mills' nominal prices are stable, but traders are widely offering discounts, keeping actual transaction prices low. Finished product inventories are slowly accumulating, downstream weaving mills are reducing operating rates, grey fabric stocks are rising, and autumn/winter orders have yet to materialize. This suggests that the 'price support' for cotton yarn is more a passive reflection of cost than a sign of demand recovery.
Vortex-spun and color-spun yarns are also under pressure. Vortex-spun viscose and polyester-viscose yarns are weak in both volume and price; polyester yarn prices are slightly down with slower shipments. For color-spun yarns, only high-count differentiated varieties show stable demand, while regular grades face heavy destocking pressure. Differentiated yarn mills maintain full capacity but rely on small, scattered orders with one-month lead times and poor continuity. Industry operating rates are declining seasonally, and price competition is squeezing margins. Polyester yarn prices have followed raw material declines, further weakening polyester-blended yarn transactions and raising inventory burdens. Viscose yarn shows slow transaction speeds despite rising raw material costs, with mills maintaining stable operating rates and inventory levels. Overall, the yarn market exhibits 'shrinking volume and weak prices,' with mills passively accumulating inventory.
Fabric Markets: Weak Terminal Demand, Destocking Becomes the Sole Theme
The fabric segment shows even clearer off-season traits. Pure cotton grey fabric shipments have slowed, orders are small and quick-turn, finished product inventories are rising, and weaving mills are buying raw materials on a just-in-time basis with no stockpiling appetite. The yarn-dyed fabric market is also slowing; raw cotton prices have fallen by about 300 yuan/ton, high-count pure cotton yarn prices by about 180 yuan/ton, and fabric product prices are showing localized weakness with razor-thin margins. Denim fabric faces cold domestic and export markets, with reduced orders, lower mill operating rates, and sluggish shipments, forcing companies to accelerate destocking.
Notably, a strengthening US dollar adds uncertainty to export environments. For export-dependent categories like denim, the combination of exchange rate volatility and weak overseas demand means companies must closely track export trends. Overall, weak fabric demand is the concentrated expression of current industrial chain pressure, making destocking the sole near-term priority.