The cotton textile industry is navigating a deepening off-season. According to the latest survey by the China Cotton Textile Association, enterprises face slower shipments, reduced orders, and rising finished product inventories. Raw material prices show clear divergence: cotton fluctuated, polyester staple fiber fell with crude oil, while viscose staple fiber stabilized. This round of inventory reduction pains is spreading across the entire supply chain.
Raw Material Market: Divergence Intensifies, Direction Unclear
Cotton prices experienced a rally and retreat in late June. Boosted by macro factors like the US-Iran agreement, the Zhengzhou cotton futures contract hit a high of 16,140 yuan/ton, but quickly fell to around 15,615 yuan/ton as speculative fervor faded and downstream demand remained weak. The market lacks a single driver and is likely to trade in a range in the near term. For spinners, this means shorter procurement windows and higher inventory risks.
Polyester staple fiber's cost logic is being rewritten. The Strait of Hormuz shipping volume has recovered to nearly 60% of pre-conflict levels, oil prices have pulled back sharply, and the geopolitical risk premium has almost fully unwound. The polyester chain has started a catch-up decline, with futures falling to around 6,900 yuan/ton. Whether this price is a bottom depends on downstream restocking activity. Without a pickup in end-user orders, prices may remain under pressure.
Viscose staple fiber is the only bright spot on the raw material side. Mills are tight on delivery, traders are raising prices, and the market shows a temporary supply shortage. However, downstream yarn sales remain under pressure. The sustainability of viscose price strength depends on yarn mill orders. Overall, the viscose market is likely to stabilize in the short term, but upside is limited.
Yarn Market: Broad Pressure, Shrinking Margins
Pure cotton yarn continues its off-season pattern, with mills holding prices but traders offering discounts, keeping actual transaction prices low. Finished product inventories are slowly accumulating, downstream weaving mill operating rates are declining, grey fabric inventories are rising, and autumn/winter orders have yet to materialize. Mills remain cautious, with weak restocking intentions.
Vortex spun yarn and colored spun yarn also face weak volume and prices. Vortex spun viscose and polyester-viscose yarns see sluggish transactions, with mills producing mainly small orders to maintain balance. Colored spun yarn sees heavy destocking pressure for regular varieties, while high-count differentiated products maintain stable demand. Differentiated yarn mills operate at full capacity but face poor order continuity, with new orders limited to small batches and scattered lots, further compressing profit margins.
Polyester-blended yarns have followed raw material declines, with spot trading further weakening. Downstream buyers purchase only for immediate needs, leaving mills with underfilled orders and rising inventory. Viscose yarn prices are weak, with slow transactions. Mills maintain stable operating rates and inventory levels, expecting a steady but weak market.
Fabric Market: Deepening Off-Season, Rising Export Uncertainty
Pure cotton grey fabric is weak and stable, with slower shipments, few new orders, and rising finished product inventories. Weaving mills purchase raw materials on an as-needed basis, with weak stockpiling intentions. The yarn-dyed fabric market is also slowing, with orders mainly small and new orders scarce. Raw cotton prices have dropped by about 300 yuan/ton, and high-count pure cotton yarn prices have fallen by about 180 yuan/ton. Fabric product prices have loosened in some areas, squeezing margins.
The denim fabric market is sluggish both domestically and internationally, with reduced orders, lower mill operating rates, and slow product shipments. Companies are accelerating destocking, facing significant market pressure. The strengthening US dollar adds uncertainty to the export environment, with industry players closely monitoring export trends and assessing future market directions.