The 127th market survey by the China Cotton Textile Association sends a clear signal: the off-season is shifting from shallow fluctuations to systemic pressure. From raw materials to fabrics, almost every link in the chain has entered a "de-stocking" mode, accompanied by diverging raw material prices and persistently weak end demand.
Raw Material Divergence Intensifies: Cotton Volatile, Polyester Under Pressure, Viscose Tight
The cotton market recently experienced a typical "sentiment-driven" rally. After the U.S.-Iran agreement, foreign cotton prices surged, pushing the Zhengzhou Cotton futures to 16,140 yuan per ton. However, as macro sentiments fully dissipated, the traditional off-season in the cotton yarn market quickly suppressed speculative enthusiasm, and prices fell back to 15,615 yuan per ton. This "fast up, fast down" pattern indicates that current cotton pricing has detached from fundamentals and is more influenced by short-term geopolitics and financial sentiment. For spinners, this means a very narrow procurement window, and any misstep could lead to cost inversion.
Polyester staple fiber (PSF) is closely tied to crude oil costs. After the Strait of Hormuz shipping volume recovered to nearly 60% of pre-conflict levels, oil prices dropped significantly, and the geopolitical premium was almost fully unwound, triggering a catch-up decline in the polyester chain. PSF futures have fallen to around 6,900 yuan per ton. This price level directly impacts polyester-blended yarns, which have followed the decline. However, end-user buying interest has not picked up despite lower prices; instead, buyers are waiting for prices to stabilize.
Viscose staple fiber (VSF) is the only "tight" raw material currently. Factory rebates have been reduced, traders are raising prices due to supply constraints, and the tight supply situation is unlikely to ease soon. However, this tightness is not demand-driven but a result of active supply contraction. Downstream viscose yarn sales remain under pressure, with prices actually weakening, creating an inverted pattern of "raw material up, yarn down." This suggests the sustainability of VSF price increases is questionable.
Yarn and Fabric Links: Order Fragmentation and Inventory Buildup Worsen
The off-season in the yarn market has evolved from "volume contraction" to "both price and volume weakening." Pure cotton yarn prices have not been adjusted significantly, but trade discounts are widespread, keeping actual transaction prices low. Spinners' finished goods inventories are slowly accumulating, while downstream weaving operating rates continue to decline, grey fabric inventories are high, and autumn/winter orders have not yet materialized. The typical path of "inventory transferring from upstream to downstream" is essentially blocked, and inventory pressure is being passed back upstream.
Differentiated products like vortex-spun and colored yarns have not been spared. Vortex-spun viscose and polyester-viscose yarns are weak in both price and volume, with mills operating on small orders. Colored yarns, while high-count specialty varieties are relatively stable, face significant destocking pressure for regular grades. Differentiated yarn mills maintain full capacity but suffer from poor order continuity, with new orders being small and scattered, and profit margins squeezed by intense price competition.
The fabric side is even more severe. The market for pure cotton grey fabric has slowed noticeably, with orders shifting to small, quick-turnaround batches. New orders are scarce, and finished goods inventory accumulation is accelerating. Weavers are adopting a just-in-time purchasing strategy for raw materials, with near-zero willingness to build stock. The yarn-dyed fabric market has also slowed; raw cotton prices have fallen by about 300 yuan per ton, and high-count pure cotton yarn prices have dropped by about 180 yuan per ton. Fabric product prices have loosened in some areas, leaving profit margins extremely thin.
Foreign Trade Environment and Outlook: Stronger Dollar Adds Uncertainty
The denim fabric market sounds an alarm for foreign trade. The ex-factory price for 10s OE cotton yarn remains around 14,600 yuan per ton in a narrow range, but both domestic and export markets are sluggish. Orders are shrinking, mill operating rates are declining, and finished goods are not moving smoothly. Companies are accelerating destocking, but the pressure is severe. More critically, the strengthening US dollar index is directly suppressing the export environment. Companies are now in a high-frequency monitoring mode, closely tracking export trends, and their outlook for the market is generally cautious.
Overall, the cotton textile industry is undergoing a systemic adjustment driven by deepening off-season, raw material divergence, weak demand, and foreign trade uncertainties. The destocking pain is unlikely to ease in the short term. Companies need to find a new balance between cash flow management, order structure optimization, and cost control.