The cotton textile market is undergoing a notable de-stocking phase. The latest survey by the China Cotton Textile Association reveals that the off-season is deepening, with enterprises experiencing slower shipments, reduced orders, and rising finished goods inventory. Cotton prices fluctuated, polyester staple fiber fell due to weak raw materials, while viscose staple fiber remained stable due to tight supply. This divergence reflects different supply-demand dynamics and requires more refined cost management from downstream buyers.
Raw Material Markets Diverge, Cost Transmission Widens
Cotton prices saw a roller-coaster ride. The US-Iran agreement briefly boosted external markets, pushing Zheng cotton futures to 16,140 yuan/ton, but sentiment faded quickly, and prices dropped to 15,615 yuan/ton as the traditional off-season for cotton yarn weighed. Without clear drivers, prices are likely to consolidate in a range. For spinners, this means raw material cost uncertainty persists, and the window for low-price restocking may be short-lived.
Polyester staple fiber took a clearer downward path. The Strait of Hormuz restored nearly 60% of pre-conflict traffic, crude oil prices fell sharply, and geopolitical premiums were largely erased. The polyester chain then corrected, with staple fiber futures falling to around 6,900 yuan/ton. The impact is spreading downstream: polyester-blended yarn prices are following, but buyers remain cautious, purchasing only for immediate needs.
Viscose staple fiber is the only bright spot. Mills reduced discounts, traders raised prices due to tight supply, and tight delivery may persist. However, downstream yarn sales are weak, limiting price pass-through. This "tight upstream, weak downstream" structure squeezes margins for viscose yarn producers.
Yarn Markets See Volume and Price Declines, Inventory Pressure Spreads
Pure cotton yarn remains in a clear off-season. Prices are stable on the surface, but actual transaction levels are low. Trade discounts are common, and mill inventories are slowly building. Weaving mills are reducing operating rates, gray fabric is accumulating, and autumn/winter orders have not yet materialized. This "price without volume" state reflects weakening end demand forcing intermediate channels to de-stock.
Vortex-spun and color-spun yarns also face weak volume and prices. Vortex-spun viscose and polyester-viscose yarns see slower transactions, with mills producing only small orders. For color-spun yarn, high-count differentiated varieties remain stable, but regular varieties face heavy de-stocking pressure. Differentiated yarn mills run at full capacity but rely on small, scattered orders with poor continuity, intensifying price competition and squeezing profits.
Polyester-blend yarn prices have not stabilized, with market sentiment cautious. Yarn prices follow raw material declines, mills lack sufficient orders, and inventory builds. Viscose yarn prices are weak, with slow sales. Overall, the yarn market is shifting from "passive inventory buildup" to "active de-stocking," a process likely to continue into the third quarter.
Fabric Market Slows, Export Uncertainty Intensifies
The gray fabric market remains in off-season, with slower shipments, few new orders, and rising inventory. Weaving mills purchase raw materials only as needed, with no stockpiling. The yarn-dyed fabric market is also sluggish: raw cotton prices fell about 300 yuan/ton, high-count pure cotton yarn dropped 180 yuan/ton, and fabric prices are softening, leaving razor-thin margins.
Denim faces the most pressure. The ex-factory price of 10s OE cotton yarn hovers around 14,600 yuan/ton with narrow fluctuations, but both domestic and export markets are quiet. Orders shrink, mill operating rates drop, and finished goods move slowly. Companies are accelerating de-stocking. A strengthening US dollar adds export uncertainty, and industry players are closely tracking export trends to assess future market direction.