The 127th market survey by the China Cotton Textile Association paints a full picture of deepening off-season pressure across the entire cotton textile chain. From cotton and polyester staple fiber to pure cotton yarn and grey fabrics, every link is under synchronized strain, with shrinking orders and rising inventories forming a negative feedback loop. Unlike previous years, this off-season is compounded by shifts in raw material cost structures and fading geopolitical factors, accelerating the destocking pace.
Raw Material Divergence: Cotton Volatile, Polyester Collapses, Viscose Tight
The cotton market exhibited a typical sentiment-driven pattern. After the US-Iran agreement, external cotton prices pushed Zhengzhou Cotton futures to a high of 16,140 yuan/ton, but the market quickly reverted to fundamentals once sentiment faded. Weak downstream cotton yarn demand during the traditional off-season left the market without substantial industrial drivers, pulling futures back to 15,615 yuan/ton. This range-bound pattern means cotton mills will adopt more conservative procurement strategies—buying on demand and avoiding inventory buildup.
Polyester staple fiber saw a more dramatic decline. With the Strait of Hormuz shipping volume recovering to nearly 60% of pre-conflict levels, oil prices dropped sharply, eliminating geopolitical risk premiums. The polyester chain followed suit, with short-fiber futures falling to around 6,900 yuan/ton. The cost collapse directly impacted blended yarn sectors, where prices have yet to stabilize and buyers remain on the sidelines, placing further pressure on inventories.
Viscose staple fiber stands out as the only bright spot. Mills report tight supply, traders have raised prices, and factory rebates are shrinking. However, downstream viscose yarn sales remain sluggish, with prices weakening despite upstream firmness. This upstream-strong, downstream-weak dynamic suggests limited upside for viscose prices, with a stable-to-slightly-firm outlook.
Yarn Sector: Destocking Takes Center Stage
Pure cotton yarn markets remain in off-season mode. While mills have not officially adjusted prices, traders are offering discounts, keeping actual transaction prices near lows. Finished goods inventories are slowly building, downstream weaving mills are cutting operating rates, grey fabric stocks are rising, and autumn/winter orders have yet to materialize. Mills are cautiously pessimistic about the near term.
Segments like vortex-spun yarn, color-spun yarn, and differentiated yarn all face order shortages. High-count specialty products maintain relatively stable demand, but standard varieties carry heavy destocking pressure. Differentiated yarn mills are running at full capacity but with poor order continuity, relying on small, scattered orders, squeezing profit margins. Blended yarn prices remain unstable under the dual impact of falling raw materials and weak demand, keeping buyers in a wait-and-see mode.
Viscose yarn presents a notable divergence: upstream viscose staple fiber prices are rising, but yarn prices are weakening, indicating that downstream demand cannot absorb cost pass-through. Mills have not yet adjusted operating rates or inventory levels significantly, suggesting they are waiting for clearer market signals rather than proactively cutting production.
Fabric and End-Use: Order Shrinkage, Lower Operating Rates
Pure cotton grey fabric markets continue their off-season weakness, with slower shipment pace and small, quick-reorder lots dominating. Finished goods inventories are building, and weaving mills are buying raw materials on a need-only basis, showing little willingness to stockpile. Yarn-dyed fabric markets are also slowing; raw cotton prices have dropped by about 300 yuan/ton, and high-count pure cotton yarn prices have fallen by approximately 180 yuan/ton. Weak downstream demand has forced fabric prices to soften in some areas, compressing margins to thin levels.
Denim fabric markets are sluggish both domestically and for export. The ex-factory price for 10-count open-end cotton yarn remains range-bound at 14,600 yuan/ton. Factory operating rates are declining, finished goods are moving slowly, and companies are accelerating destocking. The strengthening US dollar adds uncertainty to export markets, with mills closely monitoring trade dynamics.