The imported cotton yarn ex-plant market entered a delicate stalemate in early July after volatility in May and June. Despite ICE cotton futures trending upward and Southeast Asian textile and apparel exports showing month-on-month improvement, ex-plant prices did not strengthen as expected. Instead, some categories and origins saw price easing. This phenomenon of 'costs failing to drive prices' reveals the complexity of the current game between upstream and downstream in the supply chain.
Cost vs. Demand: A Tug of War
On the cost side, ICE cotton futures returned to the 80 cents/lb level in early July, theoretically putting direct cost pressure on mills in Vietnam and India that rely on imported cotton. However, the market did not see a broad price increase. According to publicly available industry data, Indian S-6 spot cotton prices experienced a 'fall then rise' pattern recently, while CCI's auction reserve prices also went through a 'stabilize then adjust' process. This limited the volatility of mills' raw material costs. Meanwhile, the premium of Indian cotton over international prices narrowed, prompting mills to prefer purchasing domestic 2025/26 crop cotton rather than expensive imported cotton. This weakened the logic of cost-driven price hikes.
On the demand side, inquiries and procurement from fabric mills and intermediaries in China's coastal regions—Jiangsu, Zhejiang, Guangdong, and Fujian—have picked up since late June. However, buying behavior is clearly biased toward bargain hunting. There is strong price pressure on 'futures yarn' listings from second- and third-tier brands in India, Vietnam, and Indonesia, causing some offers not only to hold but to edge lower. This indicates that recovery in end-use orders remains fragile, with buyers highly price-sensitive and lacking momentum to chase higher prices.
Regional Divergence: Pakistan Watches, Vietnam Wavers
Strategies among mills from different origins show significant divergence. In Pakistan, domestic cotton prices are rising steadily, with the 2026/27 new crop coming to market gradually and mill procurement relatively active. However, export performance to key markets such as China, Bangladesh, and Vietnam has been 'mediocre', leading to a strong wait-and-see sentiment among mills and traders. Notably, demand for imported cotton in Pakistan remains weak, with mills relying more on domestic cotton. This could lead to fluctuations in yarn strength, CV value, and stability, posing a potential risk for high-end customers.
Large mills in Vietnam are in a more conflicted position. After ICE cotton returned to 80 cents, some large mills attempted to raise offers for C32S and above ring-spun yarn and high-count open-end yarn to pass on cost pressure. However, with competitors in India and Pakistan holding their offers steady, Vietnamese mills dare not raise prices aggressively for fear of losing market share. This 'want to raise but dare not' mentality epitomizes the current lack of a consensus market outlook.
Polyester-Cotton Yarn: An Independent Move from Raw Material Slump
While the pure cotton yarn market is at a standstill, polyester-cotton yarn has charted an independent course. Due to significant recent declines in crude oil, PTA, and polyester staple fiber prices, ex-plant offers for polyester-cotton yarn from Vietnam and Indonesia have dropped relatively sharply. This has, in turn, stimulated procurement interest from some coastal fabric mills and intermediaries, with inquiries and transactions increasing compared to mid-to-late June. This suggests that amid the diversification of textile raw materials, chemical fiber products have greater price elasticity and a more direct stimulating effect on end demand.