The latest market survey by the China Cotton Textile Association reveals a deepening adjustment: the off-season is intensifying, shipments are slowing, and finished product inventories are accumulating across the entire chain from raw materials to finished fabrics. This is not merely cyclical fluctuation but a structural reshaping of supply-demand dynamics under intertwined macro and micro factors.
Raw Material Divergence and Transmission
Cotton prices experienced a roller-coaster ride recently. Boosted by macro events like the U.S.-Iran agreement, the Zhengzhou Cotton Futures main contract surged to 16,140 yuan/ton. However, as market sentiment faded and the traditional off-season for cotton yarn dragged, prices quickly fell back to around 15,615 yuan/ton. This clearly indicates that the current driver of cotton prices is external sentiment rather than industrial fundamentals; the weakness in downstream demand is the fundamental reason prices cannot sustain an upward trend. Public data from the industry suggests cotton prices will likely fluctuate within a range, lacking momentum for a single-direction breakout.
Unlike cotton, the decline in polyester staple fiber prices has a clearer cost logic. The restoration of Strait of Hormuz traffic to nearly 60% of pre-conflict levels and the dissipation of geopolitical risk premiums led to a sharp drop in oil prices. After the cost support collapsed, the polyester chain began a downward correction, with staple fiber futures falling to around 6,900 yuan/ton. This means that for enterprises producing polyester-blended products, the lower raw material costs create new pricing space, but also intensify downstream wait-and-see sentiment.
Viscose staple fiber shows a relatively independent trend. Due to tight factory shipments and trader price hikes, the market exhibits obvious supply tightness. However, the pressure on downstream yarn sales acts like a sword of Damocles, limiting the upside for viscose prices. This pattern of 'upstream price support, downstream pressure' means profit distribution along the viscose chain is facing further negotiation.
Yarn and Fabric: Inventory Pressure and Order Fragmentation
Survey data shows that pressure in the yarn market is spreading from pure cotton to all categories. Pure cotton yarn prices remain stable overall, but concessionary sales by traders have become common, keeping actual transaction prices low. Spinning enterprises' finished product inventories are slowly accumulating, downstream weaving mill operating rates are declining, grey fabric inventories are rising, and traditional autumn/winter orders have yet to materialize. Vortex-spun yarn, colored yarn, and other differentiated varieties have not been spared; de-stocking pressure on regular varieties is significant, and new orders are mostly small and scattered, with poor continuity.
The fabric market's response is more direct. White grey fabric shipments have slowed, weaving mill finished product inventories are piling up, and raw material procurement is strictly 'buy-as-needed,' with extremely low willingness to stockpile. Yarn-dyed fabric enterprises are squeezed by both falling raw cotton prices and weak downstream demand; fabric product prices have loosened in some areas, squeezing profit margins to a thin level. The denim market is sluggish both domestically and internationally, with factory operating rates declining and de-stocking becoming the top priority.
A noteworthy signal is the continued strengthening of the U.S. dollar index, which adds uncertainty to the export environment. For denim and other export-oriented enterprises, the combination of exchange rate fluctuations and shrinking overseas orders constitutes the most direct external risk.
Industry Logic: Switching from 'Re-stocking' to 'De-stocking'
The core contradiction in the industry now is that the pace of terminal demand weakening has outpaced the speed of proactive contraction in the supply chain. Inventories are accumulating at all stages, from raw materials to fabrics, yet downstream purchasing willingness remains low. This 'de-stocking' pain is essentially the reverse adjustment of the previous 're-stocking' cycle. The prevalent 'small order, quick response' model is both a rational choice to cope with uncertainty and a reflection of a lack of market confidence.
For buyers, the current market is a classic 'buyer's market.' Raw material prices are volatile, finished product inventories are ample, and bargaining power has increased. The risk, however, is that the price bottom is not yet clear; excessive early stockpiling could lead to inventory write-downs. For foreign trade enterprises, exchange rate volatility and weak overseas demand are the main challenges, but the supply tightness in some categories (e.g., viscose yarn) may present short-term opportunities.